XOM Exxon Mobil Corp

By Christopher M. Matthews 

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.

The cuts are a course correction for Chief Executive Darren Woods, who laid out a plan in 2018 to spend $230 billion to double profits and pump an additional one million barrels of oil and gas a day by the middle of the next decade. That plan proved ill-timed, especially after the pandemic caused oil prices to plummet this spring.

Exxon cut its expectations for future oil prices for each of the next seven years by 11% to 17% as part of a financial-planning process conducted this fall, The Wall Street Journal reported last week, citing internal documents. The sizable reduction suggests Exxon expects the economic fallout from the pandemic to linger for much of the next decade.

Write to Christopher M. Matthews at christopher.matthews@wsj.com

(END) Dow Jones Newswires

November 30, 2020 17:23 ET (22:23 GMT)

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