The slump in prices of oil and natural gas since last year has driven the American production operations of Exxon Mobil Corporation (NYSE:XOM) and ConocoPhillips (NYSE:COP) in to loss in 1Q2015. Exxon reported a drop of 46% in its earnings which included a loss of $52 million loss from its oil and gas production in America. ConocoPhilips reported loss of $222 million.
The American oil drilling operations are relatively high cost compared to oil from Middle East. The American oil productions have been hit particularly hard by the fall in crude prices and reached six year low in 1Q. The prices of natural gas has also fallen more sharply in America that rest of the world
The impacts of the losses were offset for Exxon by its huge refining business that reported profits of $1.67 billion. Rex Tillerson, the CEO of Exxon said that the company was focused in long-term value notwithstanding the current slump.The earnings per share of Exxon were down 44 cents to $1.17 per share.
Conoco reported a drop of 87% in earnings per share to 22 cents. Conoco’s CEO Ryan Lance said that the current sump was a test for the industry, and the company is focused on various factors like cost reduction and production increase. He further stated that the company had taken steps to position for long-term performance in a more favourable commodities market.
Exxon reported that it sold U.S. crude for $42.20 per barrel in 1Q2015 this is less than half the price it got in the same period last year when crude sold for $93.18 per barrel. The price of natural gas also fell sharply to $2.53 per thousand cubic feet from $4.78 per thousand cubic feet. The production is, however, strong despite the slump in prices. Both Exxon and Conoco have been reducing costs to adjust to the slump in prices.
