HOUSTON—Exxon Mobil Corp. (NYSE: XOM) saw double-digit liquids production growth, but the barrels did not carry as much value given the drop in oil prices compared to last year.

Tough market conditions with lower commodity prices—a result of abundant supplies and not enough demand—sliced Exxon Mobil’s second-quarter 2015 earnings in half, dropping to $4.2 billion from $8.8 billion a year ago. This came despite the company’s $1.5 billion in refining business profit and upstream efforts to reduce operational costs.

“Regardless of industry conditions we remain focused on what we control,” Jeff Woodbury, vice president of investor relations and secretary for Exxon Mobil, said July 31 on a conference call.

Production worldwide grew for the second quarter, compared with the same time period last year.

Liquids volumes increased 11.9% to 2.3 million barrels per day (MMbbl/d) mainly due to new developments in Angola, Canada, Indonesia, Papua New Guinea and the United States. Overall, ExxonMobil produced 4 million oil-equivalent barrels per day (MMboe/d), up 3.6% compared to second-quarter 2014.

Gas production, however, fell 622 million cubic feet per day (MMcf/d) to 10.1 billion cubic feet per day (Bcf/d). The loss was attributed to regulatory restrictions in the Netherlands. Earlier this year, regulators cut gas production at Groningen, Europe’s largest gas field, due to public concerns about earthquakes.

Despite the overall production increase, upstream profit fell to $2 billion, down from $5.9 billion in second-quarter 2014, as oil and gas prices continued to tumble.

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“Throughout the commodity price cycle Exxon Mobil has a relentless focus on reducing costs and improving efficiencies in our operations while maintaining high operational integrity,” Woodbury said. “This position is enabled by our disciplined and measured approach to resource development, deployment of proprietary technologies and our intense focus on efficiency and productivity.”

Woodbury pointed out how the company saved about 30% in drilling and completions costs compared to 2014. “These savings include market benefits as well as ongoing structural cost efficiencies and productivity improvements across our operations,” he added.

Although the growth fell short of some analysts’ expectations, others were impressed.

In an analyst note on July 31, Simmons & Co. International called the 3.5% year-over-year production growth “strong” and “well ahead” of its model.

However, Roger Read, senior analyst with Wells Fargo, said in a note that the reported production volumes fell short of its estimate, although liquids production was on point with what was expected.

“We see the results as short of our consensus expectations though lower-than-expected capex shows management is doing what it can to adjust the business model,” Read said in the July 31 analyst note.

Capital and exploration expenditures were $8.3 billion, down 16% from second-quarter 2014.

Production remains in line with Exxon Mobil’s plans, Woodbury said on the call.

During its March 2015 analyst meeting, Exxon Mobil said it aimed to increase its total net production by 2% to 4.1 million oil-equivalent barrels per day in 2015 and up 3% annually in 2016 and 2017 to 4.2 and 4.3 million oil-equivalent barrels per day, respectively.

From 2012 to 2017, Woodbury said Exxon Mobil committed to shareholders to bring on 32 high-quality long-life assets.

“We’re about half way through that in terms of starting them up. We had a very substantial tranche of startups in 2014 with eight. This year we have another seven starting up,” he said, noting more will come in 2016 and 2017 as others await final investment decisions.

Meanwhile, Exxon Mobil is pushing forward with upstream projects worldwide.

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Offshore Guyana, ExxonMobil discovered 295 feet of oil-bearing sandstone reservoirs in the 6.6 million acre Stabroek Block. The company is currently assessing the commercial viability of the resources and potential for additional exploration work in the area.

In Romania, deepwater drilling continues on the Neptune Block, where five wells have been drilled to date, Woodbury said.

The Kearl oil sands expansion project in Canada started ahead of schedule in June. Production here averaged 130,000 barrels of bitumen per day in the second quarter, he said. Production is expected to reach 220,000 bbl/d.

Woodbury pointed to Exxon Mobil’s Erha North Phase 2 project in Nigeria as an example of how the company is being capital-efficient. “The subsea project utilizes existing processing facilities and avoids the need for an additional FPSO vessel,” he said. “Deepwater drilling and subsea equipment installation are progressing with startup expected later this year.”

At the Banyu Urip development in Indonesia, Woodbury said the company is experiencing “favorable well performance and production is now more than 80,000 barrels per day.” The central processing facility is expected to startup in the next few months, enabling the project to reach peak production of more than 200,000 barrels per day by year-end.

Onshore the United States, Woodbury said the company is working to unlock the value of more than 15 billion oil-equivalent barrels. Through its XTO Energy affiliate, Exxon operates in all of the major oil and gas plays.

“Near-term emphasis is on the development of 2.4 million net acres in the liquids rich Bakken, Permian and Woodford-Ardmore-Marietta, where investment opportunities remain attractive in today’s price environment,” he said. “Net production in these three areas was about 240,000 oil equivalent barrels per day in the second quarter, up more than 20% from the second quarter of last year.”

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Velda Addison can be reached at vaddison@hartenergy.com.