Exxon swims 'upstream' as profit dips, exploration costs fall

Luke Sharrett | Bloomberg | Getty Images

Exxon Mobil reported a lower first quarter profit on Thursday, but its bottom line was helped by a surge in upstream earnings and lower exploration costs.

The world's largest oil and gas producer posted quarterly earnings including items of $9.1 billion, or $2.10 per share, down from $2.12 per share in the comparable year-ago period. Revenue slipped to $106.8 billion, from $108.8 billion a year ago. Analysts had expected Exxon to report earnings per share of $1.88 per share on $108.8 billion in revenue, according to a consensus estimate from Thomson Reuters.

Oil: Majors should focus on exploration

Cost cutting, particularly in the area of capital and exploration expenditures during the quarter, helped Exxon boost its profitability. Capital and exploration costs were $8.4 billion, down 28 percent from a year ago. Meanwhile, earnings from upstream operations rose to about $7.8 billion in the first quarter of 2014, up $746 million from the first quarter of 2013, helped in part by the natural gas price surge during the frigid winter months.

ConocoPhillips was also helped by the nat gas surge during the tundra-like conditions that prevailed during the winter, reporting earnings that . Both Conoco and Exxon have increased investment in North American shale fields that produce crude oil and natural gas liquids.

Continuing Big Oil's ongoing story of declining production returns, the energy behemoth saw oil production slide 5.6 percent year-over-year to 4.2 million barrels of oil equivalent per day. That comes against a backdrop of surging U.S. production, the likes of which major oil companies have been unable to profit.

Read MoreOil firms answer to global calamity: Insurance

Cramer's Mad Dash: XOM

CEO Rex Tillerson recently said the world's largest economy may achieve energy independence by 2020—but Exxon has yet to reap the rewards of that shale boom.

After the earnings announcement, the world's largest oil and gas company saw its shares rise modestly in premarket trading. (Click here to get the latest quotes for the company.) This week, Exxon's stock quietly climbed to a new 52-week high, tracking a broad revival in the energy sector yet still lagging gains in the S&P 500 Index.

By CNBC's Javier David. Reuters contributed to this report.