The oil prices have yet to hit their pre- 2014 high of over $90 per barrel, although they have recovered from their slump to a more stable $50 per barrel. While Chevron posted a healthy profit of $1.3 billion in its 4th quarter, after 3 straight quarterly losses, defying analysts, Exxon Mobil’s US pumping arm reported a straight 7th quarterly loss as the financial woes continue for the US’s largest oil company.
The quarterly loss this time amounted to $477 million for Exxon Mobil as earnings slumped to more than 38% from the previous year. The figure is higher than what Wall Street had speculated previously.
Making things worse as far as timing goes, in the preceding month New York Attorney General and The SEC had delved into separate rounds of investigations into accounting malpractices of Exxon as they failed to lower the overall value of their oil and gas supplies despite the huge decline in prices experienced in the past year.
The company is not just grappling with external issues as the internal long-term debt has shot up to $46 billion as the oil giant comes to term with the declining oil prices. The quadrupling in debt has occurred as they try to cover up massive drilling costs and also pay off its habitual high dividends to shareholders.
The last time Exxon reported a profit for its US pumping arm was back in 4th quarter of 2014 and has made the company adopt strict financial measures to curb the damage, like shelving shareholder friendly stock buybacks.
As concerns regarding its accounting practices come to fore, Exxon has indicated that it might lower down the value of its oil and gas assets by writing them down – a practice which was pursued by other energy companies much earlier. Things are looking tough for the oil giant as shares have experienced a 2% downfall as the oil prices fell in Mid-February to alarming levels.