Exxon Mobil to slash capital expenditures to $23 billion, down 25% from last year

Oil storage tanks and refining facilities sit at the Esso oil refinery, operated by Exxon Mobil Corp. in Fawley, U.K.
Simon Dawson | Bloomberg | Getty Images

Exxon Mobil on Wednesday said it plans to cut capital expenditures to $23 billion, down 25 percent from the previous year.

The cuts will come mainly from oil and gas production, with a slight decrease expected again in 2017, partly from its chemical operations.

Exxon expects production to be 4 million to 4.2 million equivalent barrels per day annually through 2020, essentially flat compared to 2015.

Even with the flat production, Exxon forecast cash flow from operations would grow, assuming oil prices in the $40 to $80 range.

Exxon shares fell 0.3 percent in premarket trading to $81. The stock has been relatively resilient despite the dramatic decline in oil, falling just 7 percent over the last 12 months, even as the price of crude was nearly halved.

The company also said it would focus on paying a growing dividend, reassuring news to energy investors who have seen returns slashed throughout the sector.