Exxon Mobil's quarterly profit rose 41 percent because the company sold oil and natural gas at higher prices, making up for lower production.
The world's largest publicly traded oil company, which owns and operates oil and gas fields from Texas to Qatar, said prices rose sharply in the third quarter. Its refineries also charged more for gasoline and other fuels that they make from oil.
Exxon sold oil in the U.S. for an average of $95.58 a barrel, up 35.2 percent from a year earlier. Internationally, it charged $107.32 a barrel, up 45.4 percent. It also charged more for natural gas.
The higher prices boosted earnings at Exxon's exploration and production business, which finds and pumps oil and natural gas. Earnings rose nearly 19 percent in the U.S. and 61 percent internationally.
Exxon's U.S. refineries also benefited. Their profits quadrupled as demand for gasoline and other fuels soared around the world, enabling them to charge more.
Yet the production decline was a disappointment for the Irving, Texas-based company. Exxon has outspent other oil giants over the past few years in the search for new fields. So far this year, it shelled out $24 billion on projects. Exxon's oil production fell 7 percent while natural gas production slipped 3 percent
Some of the declines resulted from deals that limit the amount of oil Exxon can sell as prices rise on international markets. Excluding those limits, however, production was still flat.
BP and Royal Dutch Shell also reported production declines in the July-September quarter. .
Still, Exxon Mobil Corp.'s total net income rose to $10.33 billion, or $2.13 per share, in the third quarter. That compared with $7.35 billion, or $1.44 per share, a year earlier.
Revenue rose 32 percent to $125.3 billion.
Shares of the Irving, Texas-based company rose Thursday after it announced the quarterly results. Investors were encouraged by oil prices in the futures market. The price of crude rose more than 3 percent to $93.10 in New York.
Exxon's stock price climbed 9 cents to $81.16.
Exxon's production declines this quarter raise larger concerns. It takes years to find new sources of oil, and demand is rising as China and other countries need more fuel to run and expand their economies. Analysts say they're concerned that major producers are so far unable to supply enough crude.
"I think there is a danger that we can't keep up with demand," Argus Research analyst Phil Weiss said.
But if companies find and successfully pump oil, that should raise production levels and eventually provide producers with a return for the billions they're spending on exploration.
Chris Kahn can be reached at http://twitter.com/ChrisKahnAP.