Annual profits at Exxon Mobil, the world's largest publicly listed oil and gas firm, fell by 51% to $7.8bn (£6.2bn) last year.
The company wrote off $2bn from the value of undeveloped gas fields in the Rocky Mountains in the US.
It also blamed the profit slump on low oil and natural gas prices for the past two years.
Exxon's former chief executive, Rex Tillerson, is likely to become the next US secretary of state.
He is the first choice for the job of the newly-elected President Donald Trump.
"Financial results for the year were negatively impacted by the prolonged downturn in commodity prices and the impairment charge," said Darren Woods, who replaced Mr Tillerson as chief executive officer.
Oil price fall
Despite this, the company's shareholders received $12.5bn in dividends for last year.
The gas field write-off is partly a response to pressure from the US authorities at the Securities and Exchange Commission (SEC).
Last September it asked the company to explain why, in the light of the big fall in oil prices, it had not cut the book value of some of its assets, when the firm's main rivals had all done so.
At the time Exxon said it was "fully complying" with a request from the SEC for accounting information.
But the annual results fail to make any mention of the issue.
Brent crude, the international benchmark, finished 2016 priced at about $56.80 a barrel, down 48% compared with two years earlier.