Followers | 689 |
Posts | 143817 |
Boards Moderated | 35 |
Alias Born | 03/10/2004 |
Sunday, June 16, 2019 12:56:21 PM
By: The Motley Fool | June 16, 2019
The oil giant has a clearly defined five-year strategy.
In March 2018, ExxonMobil (NYSE:XOM) announced a bold vision for the future. The oil behemoth planned to increase its investment spending rate over the next several years, which it believed would unleash a torrent of new production and cash flow. In the company's view, it could double its earnings and cash flow from 2017's level by 2025, assuming no changes in oil prices.
Fast-forward one year, Exxon now expects to deliver an even bigger surge in profitability over that time frame. Here's a look at where the oil giant plans to be five years from now.
An even bigger upstream oil and gas behemoth
ExxonMobil produced 3.8 million barrels of oil equivalent per day (BOE/D) in 2018. The company sees that number rising to roughly 5.2 million BOE/D by 2025, or a more than 36% increase over that time frame.
That's a bit better than the 5 million BOE/D the company initially forecast for 2025 thanks to its successes over the past year. Two factors now have the company on track to produce an even larger gusher of production. First, it has found even more oil offshore Guyana. It made five discoveries last year and two more so far in 2019, bringing the total to 12 that hold an estimated 5.5 BOE of recoverable resources. That's a big enough base to support five floating production platforms (up from its initial view of three), which should produce more than 750,000 BOE/D for Exxon and its partners by 2025.
The second driver of Exxon's enhanced long-term outlook is the Permian Basin. Initially, Exxon thought it could grow its output in this region up to 600,000 BOE/D by 2025. However, it now sees its production topping 1 million BOE/D by 2024, fueled in part by greater confidence in its resources after a year of drilling and appraising not only its legacy acreage but the land it acquired in 2017.
Those two main fuels have Exxon on track to triple its upstream earnings by 2025 assuming a flat $60 oil price. Meanwhile, the company sees its upstream cash flows growing by a 7% annual pace over that time frame.
A downstream refining and chemicals giant
In addition to being one of the largest oil and gas producers in the world, Exxon is a major oil refiner and petrochemical producer. Those operations enable the company to maximize the value of its production as it turns oil and gas into higher-valued products like diesel and the building blocks for plastics.
One of Exxon's aims in the coming years is to expand its downstream capacity, especially in the U.S. so that it can take advantage of North America's gusher of low-cost oil and gas resources. The company outlined several goals last year that would enable it to make even more money on these downstream activities by 2025.
On the refining side, Exxon wanted to invest in midstream infrastructure in the Permian Basin to increase the flow of that low-cost oil to its refineries along the Gulf Coast, which it intended on expanding. The company took important steps forward on both goals last year. On the midstream side, the company and its partners sanctioned the Wink to Webster pipeline that will move more than 1 million barrels of oil per day (BPD) from the Permian to the Texas Coast by 2021. Exxon also took a major step toward increasing its refining capacity by approving the expansion of its Beaumont refinery by 250,000 BPD. That will bring the facility's total capacity to 616,000 BPD, making it the country's largest refinery. It's one of six refinery expansions the company expects to start up by 2025.
On the chemicals side, the company plans to have 13 new facilities on line by the end of 2025, which should grow sales by 30%. Exxon made excellent progress on moving forward with those projects in the last year, including sanctioning a new $2 billion expansion of its chemical plant in Baytown, Texas, last month. As a result, the company remains on track with its bold chemicals expansion program.
An even greater earnings and cash flow gusher await
When Exxon released its initial vision for 2025, the company thought it could double earnings from 2017's level in that time frame assuming oil remained flat at around $60 a barrel. However, thanks to its successes over the past year, the energy giant now sees earnings growing 140% by 2025 under that same oil-price scenario. In the meantime, it expects to produce more than $190 billion in free cash flow during that period, which is enough money to cover its 4.7%-yielding dividend with $90 billion to spare. That leaves it with plenty of excess cash to buy back its shares, which have surprisingly declined by double digits in the last year despite all that progress. That makes the oil giant an even more compelling oil stock to consider buying these days.
Read Full Story »»»
• DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• DiscoverGold
Recent XOM News
- Microsoft Boosts Share Buyback, Raises Dividends by 10%, Intel Secures Chip Deal with Amazon • IH Market News • 09/17/2024 10:40:35 AM
- U.S. Stocks Close Mixed Ahead Of Fed Policy Meeting; Dow Hits New Record High • IH Market News • 09/16/2024 08:48:00 PM
- OpenAI Unveils Strawberry AI Model Series; Boeing Stock Falls 4% Amid Strike; HR Surges 20% on Growth Forecast • IH Market News • 09/13/2024 10:12:55 AM
- GameStop plunges 11% on stock offering, DJT drops post-debate, GSK fails shingles vaccine trial • IH Market News • 09/11/2024 10:25:41 AM
- Khaled bin Mohamed bin Zayed Witnesses Signing Ceremony for ADNOC and ExxonMobil Partnering in World’s Largest Low-Carbon Hydrogen Facility • Business Wire • 09/04/2024 12:00:00 PM
- High Volatility Expected in Nvidia Report, Ambarella Soars 20%, Hertz Strengthens Board, Apple Cuts Jobs • IH Market News • 08/28/2024 09:50:36 AM
- Apple Names New CFO, Sony Hikes PS5 Price in Japan, Santander Launches Share Buyback • IH Market News • 08/27/2024 09:35:22 AM
- ExxonMobil to Speak at Barclay’s 38th Annual CEO Energy-Power Conference • Business Wire • 08/22/2024 12:00:00 PM
- Walmart Sells JD.com Stake, Microchip Suffers Cyberattack, Union Pacific Warns of Strike in Canada, and Latest News • IH Market News • 08/21/2024 12:12:11 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 08/14/2024 03:02:01 PM
- Dell Stock Slide Offers Opportunities; Trump and Musk hold talks on X; GM Restructures China Operations, and More • IH Market News • 08/13/2024 09:43:49 AM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/05/2024 05:15:44 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/02/2024 10:31:19 AM
- ExxonMobil Announces Second-Quarter 2024 Results • Business Wire • 08/02/2024 10:30:00 AM
- U.S. Stocks Move Sharply Lower As Data Raises Economic Concerns • IH Market News • 08/01/2024 08:44:00 PM
- Form 8-K/A - Current report: [Amend] • Edgar (US Regulatory) • 08/01/2024 01:46:48 PM
- ExxonMobil to Release Second Quarter 2024 Financial Results • Business Wire • 07/23/2024 06:42:00 PM
- Berkshire Sells BofA Holdings, Ryanair Shares Drop 12%, Delta Still Struggling After IT Disruption • IH Market News • 07/22/2024 09:44:17 AM
- BP Slashes Profit Forecast by $700 Million; Morgan Stanley Predicts S&P 500 10% Drop, and More News • IH Market News • 07/09/2024 10:54:32 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/08/2024 11:07:33 AM
- Paramount-Skydance $28B Merger, Boeing Agrees to Plead Guilty with $243.6M Fine, and More News • IH Market News • 07/08/2024 10:37:52 AM
- Apple Joins OpenAI Board, Logitech President Opts Out of Reelection, and More News • IH Market News • 07/03/2024 10:59:39 AM
- Doordash and Deliveroo Terminate Talks; Universal Announces UK Theme Park Plan, and More News • IH Market News • 06/26/2024 11:08:35 AM
- ExxonMobil and EV battery maker SK On sign MOU regarding U.S. produced Mobil™ Lithium • Business Wire • 06/25/2024 02:00:00 PM
- ExxonMobil Adds Air Liquide to World’s Largest Low-Carbon Hydrogen Project • Business Wire • 06/24/2024 03:45:00 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM