Exxon Mobil Corporation (NYSE: XOM) instructed its nonessential staff to evacuate the Las Flores Canyon plant, located in the southern part of California as wildfire engulfed the area just recently. The Exxon spokesperson Mr. Todd Spitler confirmed that the employees who stayed at the premises “are involved in various fire-protection activities”.
According to the Santa Barbara County Sheriff’s Office, the wildfire broke out in the afternoon on Wednesday close to Refugio Road, Sherpa Ranch, as authorities continue to empty portions of Refugio Canyon, Las Flores and the refinery of Exxon Mobil, among others. High 101, which extends from Buellton to Goleta, stays closed.
The shutdown of the Exxon Mobil refinery has stopped the transport of oil from Santa Barbara wells to the refineries located in other regions of California. For the Exxon spokesperson, the main concern of the energy giant is to ensure the “safety of our employees, contractors and the environment.”
A pipeline outage in Line 901 at the Las Canyon Flores facility during the month of May in the previous year has left Exxon with 425,000 oil barrel in its storage tanks since the oil company was not able to move it to other regions. This event has continued to pose environmental threats. Because of this, Exxon Mobil was recently given the permission to begin transporting it to other areas by the Santa Barbara County planners.
The news report comes at a time when the energy corporation is also struggling with the low crude oil price environment. The decline in the oil market during the summer of the year 2014, drove the oil prices down to $60 a barrel a year ago, reaching a high of $115 a barrel in the month of June in 2014. The prices of crude oil continue to extend their losses with the West Texas Intermediate crude presently changing hands at $47.23 a barrel, lower by 1.62 percent. Meanwhile, Brent crude is currently trading at $48.17 a barrel, lower by 1.63 percent.
The financial position of Exxon Mobil has deteriorated. During the first quarter of fiscal year 2016 (1QFY16), the earnings of the energy firm significantly slumped by 63 percent. In addition, the company has posted adjusted earnings per share (EPS) of approximately 43 cents, in comparison to the market analysts’ forecast of 28 cents per share. Meanwhile, the corporation’s revenue for the mentioned quarter came in at $48.7 billion, going beyond the projections of Wall Street analysts by about 10.22 percent. The figure also represents a slump of 28 percent on a year-over-year (YoY) basis.
Since Exxon Mobil is already struggling because of the deterioration in its balance sheet as a result of the oil market decline, we are under the belief that the most recent event involving the Exxon refinery shutdown would make the financial position of the energy giant much worse. The reason behind this is that the latest shutdown incident resulted in several oil barrels being sent offline.
As of 7:58 PM GMT -4, the XOM stock is changing hands by $91.22.