Exxon's Net Rises, but Energy Output Falls

By MELODIE WARNER

Exxon Mobil Corp.'s XOM -0.44%fourth-quarter earnings rose 5.9% as strength in its refining business helped offset lower energy production, while Chevron Corp. CVX +0.18%reported gains in both earnings and output.

Exxon, the world's largest publicly traded oil company saw its production levels fall to a three-year low during the third quarter. Unstable prices for crude and natural gas have also challenged Exxon's revenue in recent quarters.

The company has sought to boost its reserves and production, especially of profitable crude oil, by buying assets in the prolific Bakken shale in North Dakota from Denbury Resources Inc. DNR +0.78%It also has formed joint ventures with heavyweights like OAO Rosneft to tap Arctic resources, but that is an effort that could take many years.

Exxon reported a profit of $9.95 billion, or $2.20 a share, up from $9.4 billion, or $1.97 a share, a year earlier. Revenue dropped 5.3% to $115.17 billion.

Exploration and production earnings declined 12% to $7.76 billion as production fell 5.2% on an oil-equivalent basis. Refining and marketing earnings jumped to $1.77 billion from $425 million a year ago as stronger refining-driven margins increased earnings by $1.2 billion.

Chevron, the second-largest U.S. oil company by market value after Exxon, reported a fourth-quarter profit of $7.25 billion, or $3.70 a share, up from $5.12 billion, or $2.58 a share, a year earlier. Revenue rose 1% to $60.55 billion.

The company had said its profit would be "notably higher" than the previous quarter's as a $1.4 billion gain from an upstream asset exchange in Australia and West Texas oil field acquisitions would contribute to increased oil and gas production. But the company also warned it would pay up to $400 million in potential accruals related to income taxes, pension settlements and environmental matters.

Operating margin for the quarter improved to 19.8% from 16.6%.

Exploration-and-production earnings rose 20% to $6.86 billion as total oil-equivalent production increased 1.1% to 2.67 million barrels per day. Its refining, marketing and chemical operations swung to a profit of $925 million from a year-earlier loss of $61 million.