That helped the company’s fourth-quarter income rise 2 percent. Net income totaled $9.4 billion, or $1.97 per share, compared with $9.25 billion, or $1.85 per share, a year earlier. Revenue rose nearly 16 percent to $121.6 billion.
Exxon Mobil Corp., like other major oil companies, is struggling to tap new sources of oil fast enough in an environment where big finds are rarer and costlier to exploit. Potential fields lie deep under the seabed, or in shale rock formations that require expensive technology to crack open. When Exxon can’t find oil fast enough, it is stuck with existing fields where production is declining.
In the fourth quarter Exxon’s oil and natural gas production fell 9 percent, even though it has plowed more than $20 billion a year into finding new sources since 2007.
Exxon says its investments will pay off long-term. Still, investors worried about the company’s ability to raise production and sent the company’s stock price down 2 percent on Tuesday.
Rivals like Chevron Corp. are struggling with the same challenges. Last week Chevron reported 2011 production levels that were the lowest since 2008.
Exxon’s is also grappling with its $30 billion bet on natural gas from two years ago. In 2010, the company bought XTO Energy Inc., a huge natural gas producer. Exxon won praise for the deal because natural gas prices were falling. Experts assumed that prices would rise once the U.S. economy strengthened following the 2007-2009 recession.
The XTO Energy deal sparked a stampede by major energy companies into North American gas markets. A surge in drilling has since pushed production to record levels in the U.S., creating record levels of supply.
This January, the price of natural gas dropped to its lowest since 2002.
Now, Exxon is looking to oil to hedge its natural gas bet.
On Tuesday, the Irving, Texas energy giant said that it has shifted U.S. operations to focus more on developing wells rich in oil. It didn’t give more details. But investor relations Vice President David Rosenthal told investors in a conference call that Exxon must commit itself to a “higher value, higher margin’’ business.
