Spencer Platt/Getty Images News
Exxon Mobil (NYSE:XOM) disclosed Thursday it expects $2.4B-$2.6B in Q4 impairments related to its upstream business, mostly related to idled assets in California, and said changes in oil prices would knock $400M-$800M from upstream earnings in the quarter compared with Q3’s $6.1B.
In an SEC filing, Exxon (XOM) said “continuing challenges in the state regulatory environment have impeded progress in restoring operations” at its idle Santa Ynez assets and related facilities in California.
The company temporarily suspended production at its Santa Ynez oilfield after a 2015 pipeline leak before resuming crude shipments via trucks, which later were restricted by state regulators that cited environmental risks.
Exxon (XOM) also said reduced Q4 earnings from lower oil prices would be at least partially offset by higher natural gas prices, while a $1.5B-$1.7B drop in refining earnings would be partly mitigated by a $1B-$1.4B gain in unsettled derivatives.
Earlier this week, Chevron warned it would take $3.5B-$4B in writedowns on its upstream assets, largely due to California’s energy policies.
Exxon (XOM) expects to announce full Q4 results on February 2.
