ExxonMobil is interested in acquiring more assets in the Permian Basin of Texas and New Mexico, the heartland of the US shale oil boom, and could do a substantial deal, the company said on Friday. Jack Williams, a senior vice-president of Exxon, told analysts on a call to discuss the company’s first-quarter earnings that he”would be surprised if over time we did not pick up more Permian acreage”, either through small-scale purchases of assets or a larger acquisition. His comments show Exxon’s interest in further consolidation in the Permian region, which is at the center of the takeover battle between Chevron and Occidental Petroleum for control of Anadarko Petroleum.
Chevron also reported earnings on Friday morning, and on their call with analysts, its executives emphasized the merits of their agreed deal with Anadarko, including opportunities for cost savings. Mr Williams was speaking as Exxon reported a 50 percent drop in earnings per share for the quarter to 55 cents, well below the average of analysts’ forecasts, as it was hit by “extremely challenging” conditions in its refining and chemicals operations. The group’s refining operations fell to a $256m loss in the quarter as their margins were crushed by oversupply in world gasoline markets. They also lost the benefit they had gained last year from some very low prices for Canadian crude, caused by a shortage of export pipeline capacity.
In the chemicals division, profits dropped by 49 percent to $518m, as the wave of investment in new capacity in recent years led to increased supplies and put downward pressure on prices. The upstream oil and gas production division was more resilient, but profits still fell 18 percent at $2.88bn, hit by lower prices.