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Breaking out of a debilitating two-year slump with spectacular discoveries in Guyana, ExxonMobil announced today that it added 2.7 billion barrels of proven oil and gas reserves in 2017, replacing 183% of its production.
Why it matters: The result is relief for ExxonMobil which, for decades the standard of Big Oil, has suffered black eye after black eye for performance failures, and begun being treated by Wall Street as a mere mortal on the oil patch.
Exxon said it had 21.2 billion barrels of proven reserves at the end of 2017, 1.2 billion more than the previous year. It said that among the additions were 3.2 oil-equivalent barrels discovered offshore from Guyana, which with the find will become one of the world's newest and most surprising petro-states. This is a significant break for the company:
- In 2016, the company's reserve replacement was 65%, down 3.3 billion barrels of oil equivalent, partly a result of low prices that made a lot of its proven oil uneconomic to produce. Under SEC rules, that disqualified this oil as booked reserves. For instance, Exxon had to write off its entire 3.5 billion-barrel bitumen project in Alberta, Canada.
- In 2015, Exxon replaced only 67%.
But but but: Exxon still has a ways to go. On Feb. 2, its share price plunged when it reported 2017 earnings that fell short of expectations. Exxon shares rose slightly today, but are still 13% down from its one-year peak on Feb. 1.