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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.


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01-05-24 0519ET

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