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Exxon profit plunges with oil prices

Published:Wednesday | February 3, 2016 | 2:00 AM

The big plunge in oil prices is taking Big Oil's profits down.

Exxon Mobil Corp said Tuesday that fourth-quarter profit fell 58 per cent to US$2.78 billion. It was the oil giant's smallest profit since the third quarter of 2002.

Exxon's core exploration and production business lost money in the US and international earnings plummeted by nearly two-thirds. One of the few bright spots, Exxon's refining operations, was more profitable than a year ago. That helped Exxon avoid the fate of rival Chevron Corp., which lost money in the fourth quarter.

Britain's BP said Tuesday that its profit tumbled more than 90 per cent.

Exxon shares fell two per cent to US$74.70 in trading before the opening bell.

The amount of oil on the market remains is at extraordinarily high levels and producers, with prices so low, continue to drill just to earn what they can. Exxon's production rose nearly five per cent. In 2015, the company pumped oil and natural gas equal to 4.1 million barrels a day.

CEO Rex Tillerson called it a "challenging environment," but said the company is generating enough cash to continue investing in the business.

Exxon's profit fell from US$6.57 billion a year earlier, when oil prices were already beginning to tumble.

The Irving, Texas, company was still able to put up per-share earnings of 67 cents, which was 3 cents better than beat Wall Street had expected, according to a survey by Zacks Investment Research.

Revenue fell to US$59.81 billion, beating the US$50.85 billion according to a poll by the data firm FactSet.

For all of 2015, Exxon earned US$16.15 billion, or about half what it earned in 2014.

Exxon shares have fallen two per cent since the beginning of the year, while the Standard & Poor's 500 index has lost five per cent. Exxon's shares have fallen 13 per cent in the last 12 months.