DALLAS _ Exxon Mobil capped off its rough 2016 with another set of earnings that slipped from a year ago and also fell short of analyst expectations.
The oil and gas giant, headquartered outside Dallas, earned $7.8 billion last year and $1.7 billion for the fourth quarter, it said in its earnings report Tuesday. Those numbers were much smaller that what analysts had expected.
The annual profit was slightly less than half the 2015 figure of $16.2 billion. The fourth-quarter number was more than $1 billion less than the $2.8 billion from a year ago.
Exxon reported lower profits in all areas: downstream, upstream and chemicals.
This was the ninth straight quarter of lower earnings compared to the previous year. Exxon blamed lower profits on cheaper oil and gas prices and smaller profit margin for its refineries.
The company also took a $2 billion charge against earnings related to undeveloped dry gas operations in the Rocky Mountain region. Exxon acquired most of that land when it paid $41 billion in 2009 for Houston-based XTO Energy, a deal that made it the largest natural gas producer in the U.S.
Company officials pointed out that Exxon's fourth-quarter profits would have increased year-to-year if not for that $2 billion charge. "Value," "fundamentals" and "efficiencies" were mentioned as key components of Exxon's approach to weathering low energy prices.
Exxon's report marked the end of the tenure of former CEO Rex Tillerson. He spent a decade in charge of one of the world's largest companies and is now poised to become secretary of state if confirmed by the Senate.
Darren Woods, who ran Exxon's refineries, took charge of the company on Jan. 1.
The industry is starting to slowly recover from the deep and prolonged slump in energy prices that's hammered profits and benefitted consumers.
A report from the law firm Haynes and Boone found that at least 114 North American oil producers _ mostly smaller ones _ filed for bankruptcy in 2015 and 2016.
Low prices have lead Exxon and other companies to scale back investments as a way to lower costs.
Exxon's capital-and-exploration spending in the fourth quarter was down 35 percent from a year earlier. Annual capital and exploration spending was 38 percent lower in 2016.
Exxon vice president Jeff Woodbury described that as a part of the company's "relentless focus on costs." There is a slight turnaround projected with the company expecting to boost spending by $2.7 billion to $22 billion in 2017.
Oil and gas analysts have generally predicted a slow, tentative recovery for 2017. The existing supply is still high enough to prevent a fast rise in prices. Also, Woodbury previously said domestic oil companies could tap into a shale and other unconventional fields and rapidly increase supply if prices increase enough.
Exxon is investing in that part of the market, too. The company announced a deal in January to pay as much as $6.6 billion for Bass family oil and gas leases with an estimated 3.4 oil equivalent barrels in the Permian Basin. About two-thirds of Exxon's unconventional oil and gas production is in the Permian Basin.
Analysts quizzed Woodbury about the deal in a conference call that followed the release of the earnings. This was Exxon's biggest deal in six and a half years.
Woodbury said the large amount of contiguous, undeveloped acreage would allow Exxon to drill at a lower cost. He said more than 85 percent of the wells are expected to have horizon drill lengths of two miles or longer.
"This transaction increases Exxon Mobil's inventory of Permian drill wells that yield at a 10 percent rate of return at $40 per barrel to more than 4,500 wells," Woodbury said.
Oil prices are now in the mid-$50 range.
