XOM: Earnings More Than Double

More data that the recession / global downturn is waning: XOM's second quarter income nearly doubled to $7.56 billion.

This is XOM's highest quarterly profit since the $7.82 billion earned in the last three months of 2008.

[XOM's record-setting (and anomalous) quarter was the third quarter of 2008,  when it earned $14.84 billion, mostly due to the fact that oil  had spiked to nearly $150 per barrel; this quarter, the price of oil ranged from $60 to $80.]

XOM's profits hit a six-year low in the second quarter, 2009, and that explains why the numbers seem so much better this quarter, year-over-year.

XOM said it increased production of oil and natural gas by 8 percent. At first glance that sounds impressive; it is very difficult for a company the size of XOM to increase production and reserves. To do so, they need some large fields. On the other hand, if this "8 percent increase" is year-over-year," that is compared to its 2Q 2009, that doesn't sound all that great. As noted above, 2Q 2009 was a six-year low for XOM.

This is the tie-in to the Bakken: during the period, Exxon completed the acquisition of natural gas producer XTO Energy. The deal, valued at $29 billion, immediately made Exxon the largest natural gas company in the U.S. [XTO, in turn, bought out Headington and Hunt Petroleum, both big players in the Bakken, in 2008.]