ExxonMobil 4Q earnings dive on low oil prices

ExxonMobil reported sharply lower fourth-quarter profits Tuesday following a rare decision to write down the value of some assets due to low oil and natural gas prices.

Net income in the fourth-quarter plunged 39.6 percent to $1.7 billion, while full year earnings fell by more than half to $7.8 billion.

The report was the first since Darren Woods was promoted to chief executive after President Donald Trump selected the oil giant's long-time leader, Rex Tillerson, to serve as secretary of state.

Tillerson's nomination advanced in the Senate Monday. A final confirmation vote was expected later in the week.

The drop in profits is the latest effect of a two-year slump in oil prices. However, oil prices have strengthened since a November agreement of the Organization of the Petroleum Exporting Countries to cut output.

Exxon plans to boost its capital budget in 2017 to $22 billion, up from $19.3 billion last year, vice president Jeff Woodbury said on a conference call with analysts.

Woodbury told analysts the higher spending was due to increased oilfield activity, but the company expects "some market pressures" from higher drilling costs as the industry ramps up.

Results were marred by a $2 billion asset downgrade resulting from low prices, much of it due to impairments in a natural gas region in the Rocky Mountains in the middle of the United States.

Exxon said the writing-down of assets was due to "continued weakness in the upstream industry environment during 2016, continued weak financial results for several assets in North America, and a reduction in the mid-point of the ranges of the corporation?s long-term oil and natural gas prices."

The move follows an investigation in New York for not writing down assets due to the oil price crash, a decision that allowed the company to report profits while rivals such as Chevron and Royal Dutch Shell reported losses.

ExxonMobil warned in October it also was reviewing its oil and gas reserves, a key industry benchmark, for possible downgrades. The oil giant plans to release its final tally on 2016 reserves in the next two weeks, Woods said.

Earnings for the quarter translated into 41 cents per share, below the 70 cents expected by analysts.

Shares of ExxonMobil was down 1.4 percent to $83.66 in afternoon trading.