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Exxon profits rise as refining boosted by lower crude prices

CHICAGO -- Exxon Mobil Corp. said Friday that profit unexpectedly rose as lower crude prices boosted its income from making gasoline.

Third-quarter net income was $8.07 billion, or $1.89 a share, compared with $7.87 billion, or $1.79, a year earlier, Irving, Texas-based Exxon said in a statement. The per- share result was 18 cents more than the $1.71 average of 20 analysts' estimates compiled by Bloomberg.

Exxon is looking for the next frontier in oil exploration after sanctions forced the company to halt its venture with Russia's Rosneft earlier this month on a billion-barrel discovery in the Arctic Ocean off Siberia.

Chairman and Chief Executive Officer Rex Tillerson's search for big discoveries may be hindered by collapsing crude prices, which erode cash flow needed to pay for exploration costs such as floating drilling rigs that rent for upward of $600,000 a day. Boosting Exxon's oil and natural gas production has been a perennial problem for Tillerson; the company has seen output declines in more than half the quarters it's reported since he became CEO in January 2006, according to data compiled by Bloomberg.

The sanctions forbidding American companies from helping Russia drill Arctic, deep-water and shale wells were imposed to punish President Vladimir Putin's regime for its support of Russian-speaking separatists in eastern Ukraine. The Unit

ed States has said the measures won't be relaxed until Putin withdraws support for the Ukrainian rebels.

Prior to the sanctions, Russia represented Exxon's biggest exploration prospect outside the company's home country. Exxon has exclusive drilling rights across 11.4 million acres in Russia, the world's biggest source of crude last year -- rights that are now indefinitely off limits.

Tillerson cut capital spending to $39.8 billion this year from $42.5 billion in 2013, in part because it finished some cash-devouring mega-projects such as the Kearl oil-sands development in western Canada.

Booming production in the U.S. has helped drive down the price of oil globally. New York crude lost 25 percent of its value since touching this year's peak of $107.73 a barrel on June 20. The current four-month slide is the longest such streak since July 2008-January 2009.

In the third quarter, Brent crude futures fell 5.6 percent to an average of $103.46 a barrel from a year earlier.

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