Top U.S. oil producer Exxon Mobil on Monday said it would write down the value of $17 billion to $20 billion in natural gas properties, its biggest-ever impairment, and slash spending next year to its lowest level in 15 years.
The oil major is reeling from the Covid-19 pandemic’s impact on energy demand and prices, and is trying to protect a rich shareholder payout that is yielding 8.6% and costs nearly $15 billion a year.
Coming impairments include much of the value of Exxon’s 2010 purchase of shale producer XTO Energy, a stock deal worth roughly $30 billion at the time. The XTO purchase thrust Exxon into the forefront of the U.S. shale boom, but was largely a bet on natural gas just before prices went on a decade-long slide.
Exxon will focus instead on Guyana, where it discovered up to 8 billion barrels of oil, offshore Brazil, and the Permian Basin oil field, the company said.
