ExxonMobil , the 500-pound gorilla of the integrated oil set reported its results for the first quarter of 2013 on Thursday, and the market was unimpressed. Nevertheless, the company's performance was essentially in line with what those who had observed CEO Rex Tillerson's comments at a March analyst presentation might have foreseen.

Just the facts
For the quarter, ExxonMobil reported net income of $9.5 billion, or $2.12 per share. That was higher than the $9.45 billion and $2.00 per share for the first quarter of 2012. It also comfortably topped the $2.05-per-share consensus that the analysts who follow Exxon had anticipated. Revenues for the quarter were $108.8 billion, a reduction from last year's $124.1 billion.

The revenue slide resulted from expected production declines, along with reductions in commodities realizations. Specifically, oil and liquids production was down 3.5% year over year, but slipped only 1.2% when allowing for the effects of entitlement volumes, OPEC quota effects, and divestments. At the same time, crude prices were down $8.66 a barrel from the comparable year-ago quarter.


On the natural gas side, the largest producer of that particular hydrocarbon in the U.S. participated in the price-driven production reduction that was initiated by Chesapeake Energy , the nation's No. 2 producer. As a result, gas production was 8.7% lower domestically, which led to a 5.9% global pullback in natural gas output.

Downstream, earnings were off slightly more than 2.5%. However, refinery margins were actually stronger than in the year-ago quarter -- which led to a more than $1 billion, or 72%, ,hike in U.S. refining profits -- but that strengthening was offset globally by increased expenses, reduced gains on asset sales, and foreign exchange effects. In a related area, earnings from chemicals grew by 62% to $639 million.

What lies ahead?
This look at the past quarter at ExxonMobil is obviously instructional, but a focus on the future reveals far more about the company's attractiveness as a Foolish energy investment. Indeed, I'm unable to muster any real surprise about the performance. (Indeed, as David Rosenthal, Exxon's investor relations vice president, noted on the company's call, first-quarter production volumes -- apparently the main source of consternation among those who dropped the company's share price 1.5% on Thursday -- were "in line with the projection presented at the analyst meeting in March.")

Also described at the March session, however, was the company's intention to spend about $190 billion during the next five years on various projects. Upstream, between this year and 2017, ExxonMobil has 28 major oil and gas projects in the hopper, most of which are liquids-based. In total, these start-ups are expected to add about a million oil-equivalent barrels to the company's production during the five-year span.

On the final day of the quarter, for instance, extraction began at its Kearl plant facilities in Alberta, Canada. With initial regulatory approval for 345,000 barrels a day of production, the facility's early output number will be about 110,000 barrels a day.

Production also started during the quarter at the Telok gas field offshore Malaysia in the South China Sea. When completed, the project will consist of two four-legged gas satellite platforms, which will serve as a base for 14 development wells.

Downstream, the company is in various stages of construction on facilities in Singapore, China, and Finland. In the chemicals portion of its businesses, an expansion at a facility -- also in Singapore -- has been completed, a major elastomers plant is being developed in Saudi Arabia, and plans are under way for yet another expansion -- this one at the company's huge integrated Baytown complex east of Houston.

Learning to like borscht
Probably most intriguing at ExxonMobil is its cascading relationship with Russia's giant state-controlled oil company, Rosneft. Two years ago, the companies hatched an agreement to explore the Kara Sea in the Russian Arctic, along with the Black Sea. At the same time, Rosneft received stakes in a number of Exxon's projects in the Gulf of Mexico, onshore in the U.S., and in Canada.

During the past quarter, as Rosenthal noted, the companies' "strategic cooperation agreement" was expanded further to cover another 150 million acres in the Chukchi, Laptev, and Kara Seas. Rosneft also was cut in for a quarter interest in Exxon's Point Thompson natural gas and condensate project in Alaska, and the companies may team up in the construction of a $15 million liquefied natural gas plant on Russia's Pacific coast.

If you think about it, by selling its portion of the TNK-BP joint venture to Rosneft during the quarter BP obtained a 20% ownership interest in the big Russian company. It therefore has also garnered an interest in all of the abovementioned projects.

A Foolish takeaway
On Friday, also in part due to lower crude prices, Chevron , which has been considered more compelling than Exxon in many quarters, saw its net income for the quarter dip by 4.5%. Nevertheless, given the continuously expanding world in which they operate, I'm inclined to watch the big integrated companies carefully. ExxonMobil should hardly be shunted aside.

The article ExxonMobil's Quarter Was Really Very Solid originally appeared on Fool.com.

Fool contributor David Smith owns shares of Chesapeake Energy and BP (ADR). The Motley Fool recommends Chevron and has the following options on Chesapeake Energy: long Jan. 2014 $20 calls, long Jan. 2014 $30 calls, and short Jan. 2014 $15 puts. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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