ExxonMobil (XOM 0.02%) stepped to center stage on Thursday, along with Royal Dutch Shell (RDS.B), to become the first of the integrated majors to discuss their third quarter results. While a number of factors -- including lower-than-expected output -- weakened Shell's quarter, ExxonMobil managed its first hike in the all-important production metric in a couple of years.

The numbers
By now you likely know that the Texas-based company's profit for the third quarter was $7.87 billion, or $1.79 per share, compared with $9.57 billion, or $2.09 per share, a year ago. Analysts had forecast earnings of $1.77 per share for the quarter.

The most frequently advertised production figure for the company was that its output climbed by 1.5% year over year. But if you delete the effects of some uncontrollable external factors, such as OPEC quotas, global production growth hit 2.7%. Beyond that, the company produced 5.3% more liquids volume than in the third quarter of 2012.

Given that ExxonMobil operates virtually worldwide, a host of areas could be pointed to as having induced the growth in output. Included were natural gas from Australia, along with mostly liquids output increases in Nigeria, Kazakhstan, the U.S. onshore, and Canada. Somewhat coincidentally, disruptions in Nigeria weakened Royal Dutch Shell's results.

So why the slide in Exxon's year-over-year earnings? Quite simply, the contribution from the company's refining unit plummeted to $592 million, from $3.2 billion a year ago. As I noted following the second quarter, consistent downstream softness gives one pause regarding the integrated model.

The drop in downstream earnings was even more severe a quarter ago, however, with the 2013 figure coming in at $396 million, compared with $6.65 billion for the comparable year-earlier quarter. But fully $5.3 billion of that differential was tied to a gain on the sale of downstream assets in Japan during the second quarter of 2012. This year's dip was due primarily to weak refining margins.

Important new plays
Exxon continues to spend in a big way -- $33 billion thus far in 2013 -- as it seeks to ramp up its production in a variety of venues:

  • At the Kearl oil sands project in Canada, production was started from the first phase during the spring, and now has reached about 100,000 barrels per day. As David Rosenthal, Exxon's vice president for investor relations, said on his company's call, "Kearl incorporates a number of technology innovations ... which significantly enhance environmental (benefits) and reduce capital investment."
  • At Australia's Kipper-Tuna Turrum project, production of both oil and gas has begun. According to Rosenthal, "The project represents the largest new domestic oil and gas development on the Australian eastern seaboard."
  • In the Caspian Sea, initial production from the Kashagan field occurred during the final month of the quarter, with daily output reaching 80,000 barrels.
  • In Russia, where ExxonMobil has chalked up a decade of success at the Sakhalin-1 development, the company continues to set records for the length of its extended-reach wells. In addition it's preparing for the installation of what will be the largest offshore oil and gas production platform in Russia. In 2014, when placement of the unit is expected to be completed, its related production should move toward 90,000 barrels per day.
  • Also in Russia, Exxon's joint venture with that country's giant Rosneft is actively moving toward exploratory drilling in the Russian Arctic's Kara Sea and in the Black Sea.
  • In Argentina, the company begin drilling its first operated well in the promising Vaca Muerta shale formation, an area that has garnered considerable attention from those with an interest in international shale activities.

Foolish takeaway
I could continue, perhaps describing Exxon's various activities in the U.S. Permian Basin, where it holds an industry-leading 1.5 million net acres. But it's appropriate to point out that Exxon's shares are essentially flat years to date, while a number of independent producers have fared far better. For instance, EOG Resources (EOG 0.59%), which is an operating trend setter in both the Eagle Ford and the Bakken and is unencumbered by sluggish downstream earnings, has seen its shares climb by nearly 45% during 2013.

As such, I'll simply revert to my conclusion about Exxon a quarter ago: "None of this is to urge Fools to completely eschew the major integrated companies. But as never before, using shares in ExxonMobil as a proxy for investment in conventional energy is clearly not the way to go."