Exxon Mobil Corp. is retreating from a plan to increase spending to boost its oil and gas production by 2025 and preparing to slash the book value of its assets by up to $20 billion, as the struggling company reassesses its next decade.
The Texas oil giant, which has lost more than $2.3 billion over the first three quarters of this year after the coronavirus wreaked havoc on fossil-fuel demand, released a reduced spending outlook Monday for the next five years. It now plans to spend $19 billion or less next year and $20 billion to $25 billion a year between 2022 and 2025. It had previously planned to spend more than $30 billion a year in capital expenditures through 2025.
Exxon also said it would stop investing in certain natural-gas assets and telegraphed a massive write-down of between $17 billion and $20 billion to come in the fourth quarter.
Exxon Mobil had previously resisted writing down assets by large amounts. Several of the largest oil companies have recently written down assets, including Royal Dutch Shell by up to $22 billion, BP by more than $17 billion and Chevron by $10 billion.
But Exxon has fared worse than other major oil companies during the pandemic. It was removed from the Dow Jones industrial average in August and has suffered three consecutive quarterly losses. It recently said it would cut 14,000 jobs, or 15 percent of its global work force.
Exxon’s stock, which is down more than 40 percent over the past year, is back to where it was in 2003. Company executives continue to express confidence about the future because Exxon is producing more oil and gas in the Permian Basin and in the offshore waters of Guyana and Brazil. The company has also committed to maintaining its dividend, which yields more than an 8 percent return on its share price.