Exxon Mobil on Friday posted a better-than-expected $36 billion profit for 2023, lifted by fuels trading and higher oil and gas production.
Profits from oil majors have been down in 2023 by about a third from record levels in 2022.
Exxon Chief Executive Darren Woods said the industry "saw energy prices and refining margins start to normalize in 2023."
Exxon's earnings in the latest quarter still beat estimates and Woods signaled optimism about the coming year. He raised Exxon's spending target after boosting capital spending in the most recent quarter by 4% from a year ago.
Full-year capital expenditures in 2023 were $26.32 billion.
Exxon, he said, "opportunistically accelerated drilling activity" in its two core oil production areas, the US Permian Basin and Guyana, and kick-start lithium production to supply electric vehicle batteries.
Exxon "closed 2023 on a strong note" and enters 2024 in a strong financial position, said Peter McNally, Global Sector Lead for Industrials Materials and Energy at Third Bridge.
"But the big focus for investors will be the closing of the acquisition of Pioneer Natural Resources," which will dramatically increase investments in the US Exxon expects to close the deal in the second quarter.
Shares were down less than 1% in pre-market trading.
Exxon results included a $2.5 billion impairment charge for California properties that it has been trying to sell for more than a year. Excluding that charge, annual income fell 35% to $38.57 billion.
Top oil producers are writing off unwanted assets and cleaning up their balance sheets ahead of pending deals. Chevron has said it would take an about $4 billion impairment in the fourth quarter, while Shell on Thursday took a $5.5 billion writedown.
Exxon agreed in October to buy rival Pioneer to bolster its US shale oil production in the Permian Basin, and Chevron proposed to purchase Hess Corp to get a foothold in Guyana. Both deals are now expected to close mid-year.