01/31/2012 09:07 EST | Updated 04/01/2012 05:12 EDT

Exxon Mobil profit rises 2 per cent as higher oil price makes up for drop in production

NEW YORK, N.Y. - Exxon Mobil Corp.'s fourth-quarter profit rose 2 per cent as higher oil prices made up for a drop in production.

Benchmark crude prices rose 10.3 per cent in the final three months of 2011.

That helped Exxon post net income of $9.4 billion, or $1.97 per share, in the fourth quarter, matching Wall Street expectations. It made $9.25 billion, or $1.85 per share, a year earlier.

Revenue rose 15.6 per cent to $121.6 billion in the latest quarter.

The world's largest publicly traded oil company has seen production decline even after spending a record $36.8 billion last year in search of new sources of crude and natural gas.

Exploration projects can take years to yield new production. And some of Exxon's biggest investments recently have been in U.S. natural gas fields, which so far haven't paid off because gas prices have dropped to their lowest level in a decade. Oil and gas production fell 8.8 per cent in the fourth quarter compared with the same period last year.

For the full year, Exxon's net income rose 34.8 per cent while revenue rose 26.9 per cent.

Last week, Chevron Corp. said profits slipped 3.2 per cent. ConocoPhillips reported a 66-per cent increase in quarterly earnings, though much of that came from the sale of a pipeline and other assets. Royal Dutch Shell expects to report its financial results later this week.

Exxon shares fell by 55 cents, or less than 1 per cent, to $84.94 in premarket trading.