Irving-based ExxonMobil reports $610 million loss as Texas oil prices plummet
FILE. A pumpjack sits on the outskirts of town (Photo by Spencer Platt/Getty Images)
DALLAS - Irving-based ExxonMobil lost a staggering $610 million in the first quarter of the year. It’s the first time the company has lost money since 1999.
Before the COVID-19 pandemic, Texas was the leading producer of crude oil in the U.S. Now, big companies and small independents are taking hits. The smaller producers may be the biggest losers.
Record-low prices at the pump mean record-high losses in the oil patch.
ExxonMobil reported a $610 million loss for the first quarter of this year, compared to a $2.4 billion profit for the same period a year ago.
Bruce Bullock, director of Maguire Energy Institute at SMU, says while the Irving-based company took a hit, it still scored.
“They actually did a little bit better than most analysts thought they were,” Bullock said. “So in that regard, it wasn’t that bad of a report.”
Still, coronavirus has made all of the oil and gas industry less healthy, especially oil producers that don't have the size or strength of ExxonMobil.
“It's a very rough time for smaller and independent companies,” Bullock said.
As America and the world sheltered in place, supply grew and demand dropped. It causes oil prices to fall about 70 percent since the start of the year. April was the absolute worst month for smaller players in the oil field.
“Those that are privately owned and or independently owned, they don't have the access to infrastructure to move oil that the bigger companies do,” Bullock said.
Some, especially those with high-debt and big bank loans to payback, may not make it through this rough patch without bankruptcy protection.
“The first and just about the only thing they can do is either sell their production at very, very cheap prices just to get it off their hands or they shut the wells down,” Bullock said. “Neither of them are particularly good options.”
The Texas Railroad Commission meets May 5 to decide if Texas will join with the other oil-producing states and nations and cut oil production by at least a million barrels a day.