MW Exxon Mobil to take write-down of as much as $2.6 billion on California assets

By Steve Goldstein

Exxon Mobil late Thursday flagged it might write down the value of its California assets by as much as $2.6 billion.

The oil giant $(XOM)$, in a Securities and Exchange Commission filing, said a writedown of between $2.4 billion and $2.6 billion in its upstream division mostly reflects idle upstream Santa Ynez Unit assets and associated facilities in California.

"While the Corporation is progressing efforts to enable a restart of production, continuing challenges in the state regulatory environment have impeded progress in restoring operations," said Exxon.

The offshore oil and gas field has been idled since a 2015 pipeline spill, and Sable Offshore has an agreement to buy and then restart operations from the field. Last month, the SPAC trying to buy Sable Offshore, Flame Acquisition Corp. $(FLME)$, said the closing date on the Exxon-Sable deal was pushed back until Feb. 1.

Chevron $(CVX)$ earlier this week said it would take a charge of as much as $4 billion, as it also cited California policies as well as Gulf of Mexico issues.

Exxon more broadly flagged that earnings will fall from third-quarter levels. It flagged a decline of as much as $800 million on upstream profits from changes to oil prices, and a decline of up to $1.7 billion from changes to industry margins in its energy products division, though that unit will benefit by as much as $1.4 billion from unsettled derivatives.

Exxon shares edged higher in premarket trade. The stock over the last 52 weeks has declined by 7%, a period in which the lead oil futures contract has declined by 1%.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 05, 2024 05:19 ET (10:19 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.