Replies to post #2112 on The Rising Influence of Rising Affluence

[DewDiligence]

XOM Announces Five-Year Plan for Upstream Volume and Cap-Ex

[This PR was issued in conjunction with XOM’s annual Investor Day presentation on 3/9/11. On almost any financial or performance metric, XOM ranks at the top of the Big Oil universe; many of these comparisons are shown in the webcast slides (108 pages) at http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODQ3OTd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 .

After turning gassier with the recent acquisition of XTO (#msg-60115152), XOM’s new upstream production will shift back to oil in the next few years as projects in Kazakhstan, Russia, Iraq, Canada’s oilsands, and US shales come online. These new projects will add 1.4M boe/d, which amounts to about 1/3 of XOM’s total current production; 80% of this 1.4M figure will be oil and only 20% will be gas.

XOM expects the annual decline rate of its baseline production to be only 3% (about half the industry average) due to the relatively high proportion of unconventional projects, which have longer plateaus than conventional ones. This will allow XOM to increase overall production by 4-5% per year on average during the next few years.]

http://finance.yahoo.com/news/ExxonMobil-Highlights-bw-2332129022.html?x=0&.v=1

›Wednesday March 9, 2011, 9:00 am

NEW YORK--(BUSINESS WIRE)-- Exxon Mobil Corporation (NYSE:XOM) continued to deliver industry-leading results in 2010 through an integrated and disciplined business approach, and remains well-positioned to meet growing long-term global energy and petrochemical demand, the company said today in its annual presentation to investment analysts at the New York Stock Exchange.

“During challenging times for the global economy, ExxonMobil continues to invest at record levels to deliver energy needed to underpin economic recovery and growth,” said Rex W. Tillerson, chairman and chief executive officer. “Our integrated business model enables us to deliver strong results for shareholders by leveraging financial strength, rigorous management systems and operating synergies.”

Tillerson said that ExxonMobil expects global energy demand to increase by 35 percent by 2030, compared to 2005 levels, and demand for natural gas will make it the fastest growing major energy source. To meet that demand, ExxonMobil will continue to invest through the business cycle.

“We are executing a large inventory of high-quality projects,” said Tillerson. “Actual spending in a given year will vary depending on the pace and the progress of each project. We are anticipating an investment profile of approximately $34 billion in 2011 and a range of $33 billion to $37 billion per year through the year 2015.”

The volume of oil and natural gas produced by ExxonMobil is expected to grow by between three and four percent in 2011 and by four to five percent per year, on average, between 2009 and 2014. In addition, normal field decline is expected to be about three percent per year, which is about half the typical rate, in part due to increasing levels of unconventional and long-plateau volumes.

Eleven major upstream project start-ups are planned between 2011 and 2013. In 2011, the company expects to deliver 120,000 net oil-equivalent barrels per day from 2010 project start-ups and anticipates adding almost 1.4 million net oil-equivalent barrels per day by 2016 [i.e. an amount equal to about 1/3 of XOM’s current production]. Nearly 80 percent of the new production will be oil, much of which will contribute to long-plateau volumes.

In 2010, ExxonMobil reported earnings of $30.5 billion, an increase of 57 percent, excluding special items, over 2009, and generated cash flow of $51.7 billion. This provided the company with important flexibility to fund the development of new energy, and return $19.7 billion to shareholders through dividends and a share purchase program. Over the past five years, dividends have increased by 53 percent and the share purchase program was at a level more than double that of the company’s competitors.

ExxonMobil’s return on average capital employed, a key indicator of disciplined decision making and financial performance, was an industry-leading 22 percent in 2010, more than four percentage points higher than its nearest competitor.

The company outlined its major achievements in 2010 and plans for the future. Highlights include:

• ExxonMobil replaced 209 percent of its 2010 production with proved reserves additions of 3.5 billion oil-equivalent barrels, bringing proved reserves to 24.8 billion oil equivalent barrels. It was the 17th consecutive year the company replaced more than 100 percent of its production.

• Production of oil and natural gas in 2010 increased by 13 percent over the previous year, driven by organic growth project start-ups, strong operations and the successful integration of XTO, a leading U.S. natural gas producer acquired in mid-2010.

• In the downstream, the company completed facilities at refineries in the United States and Europe to increase the supply of lower-sulfur diesel by more than 6 million gallons per day. Additional projects are under way, including new facilities to provide lower-sulfur motor fuels at ExxonMobil’s Sriracha, Thailand refinery and ultra-low sulfur diesel at its Singapore refinery.

• A major expansion at the Singapore chemicals facilities is past its peak of construction and the mechanical completion and start-up of units is to occur in phases during 2011. The expansion will add more than 2.5 million metric tons per year of additional capacity and will help meet demand growth in Asia Pacific.

• ExxonMobil Chemical Company continues to lead competitors in return on average capital employed at 26.3 percent in 2010. Over a 10-year period, the company has generated returns more than two and a half times greater than the competitor average.‹

[DewDiligence]

XOM Announces 2011 Reserves Replacement

[When I posted the corresponding PR from one year ago (#msg-60115152), the title of the post was, “XOM Is Becoming Gassier (Duh).” This title fit because, in 2010, XOM greatly increased its gas reserves from the XTO acquisition and only slightly increased its oil reserves, ending the year with its oil/gas reserves split 47/53. In 2011, however, the ratio swung back modestly toward oil and, at year-end, it stood at 49/51. 2011 “organic” reserve replacement (excluding acquisitions and divestitures) was 116%, and actual reserve replacement was 107%. The Kearl oilsands project in Canada accounted for more than half of the total YoY increase. As noted in the PR below, these reserve calculations are based on the company’s own methods, not the SEC’s.]

http://www.sec.gov/Archives/edgar/data/34088/000003408812000010/r022312ex99.htm

›23-Feb-2012

IRVING, Texas--(BUSINESS WIRE)--Exxon Mobil Corporation announced today that additions to its proved reserves in 2011 totaled 1.8 billion oil-equivalent barrels, replacing 107 percent of production. Excluding the impact of asset sales, reserves additions replaced 116 percent of production.

“ExxonMobil replaced more than 100 percent of production for the 18th consecutive year,” said Rex W. Tillerson, chairman and chief executive officer. “Our industry-leading position is a result of our strategic focus on quality resource capture, a disciplined approach to investment, and excellence in project execution. During challenging times for the global economy, we continue to take a long-term view of resource development and invest throughout the commodity price cycle. Adding reserves enables ExxonMobil to develop new supplies of energy to meet future demand and support economic growth and improved standards of living."

The annual reporting of proved reserves is the product of the corporation’s long-standing, rigorous process that ensures consistency and management accountability in all reserves bookings.

The corporation’s reserves additions in 2011 reflect new developments with significant funding commitments as well as revisions and extensions of existing fields resulting from drilling, studies and analysis of reservoir performance. Reserve additions from the Kearl Expansion Project in Canada totaled 1 billion oil-equivalent barrels. Proved additions were also made in a diverse range of countries including the United States, Nigeria, Norway, Indonesia and Malaysia. Asset sales in 2011 reduced proved reserves by 141 million oil-equivalent barrels. Liquid additions totaled 1.4 billion oil-equivalent barrels for a 166 percent replacement ratio and gas additions totaled 0.4 billion oil-equivalent barrels for a 49 percent replacement ratio.

At year-end 2011, ExxonMobil's proved reserves base increased to 24.9 billion oil-equivalent barrels. The proved reserves base is split 49 percent liquids and 51 percent gas.

Long-Term View

The long-term nature of the industry, and the large size of the discrete projects that provide a significant portion of the corporation’s reserves additions, make it appropriate to consider a time horizon longer than a single year. The 10-year average reserves replacement ratio is 121 percent, with liquids replacement at 99 percent and gas at 150 percent. The reserves additions made during this period comprise a diverse range of resource types and have broad geographical representation. ExxonMobil’s reserves life at current production rates is 15 years.

Industry-Leading Resource Base

ExxonMobil added 4.1 billion oil-equivalent barrels to its resource base in 2011, driven primarily by resource additions from the United States and Canada, as well as Australia, Indonesia and Vietnam. These additions include continued success in by-the-bit exploration discoveries, undeveloped resource additions and strategic acquisitions. ExxonMobil’s by-the-bit conventional exploration success in 2011 included discoveries in the U.S. Gulf of Mexico, Australia, Indonesia and Vietnam. In addition, discovery and delineation of North American unconventional assets contributed significantly to the resource base. Overall, the corporation’s resource base grew by 2.7 billion oil-equivalent barrels to 87.2 billion oil-equivalent barrels, taking into account field revisions, production and asset sales. The resource base includes proved reserves, plus other discovered resources that are expected to be ultimately recovered.

CAUTIONARY NOTE: Proved reserves in this release for 2009 and later years are based on current SEC definitions, but for prior years the referenced proved reserve volumes are determined on bases that differ from SEC definitions in effect at the time. Specifically, for years prior to 2009 included in our 10-year average replacement ratio, reserves are determined using the SEC pricing basis but including oil sands and our pro-rata share of equity company reserves for all periods. Prior to 2009, oil sands and equity company reserves were not included in proved oil and gas reserves as defined by the SEC. For years prior to 2009 included in our 18 straight years of at least 100 percent replacement, reserves are determined using the price and cost assumptions we use in managing the business, not the historic prices used in SEC definitions. Reserves determined on ExxonMobil's pricing basis also include oil sands and equity company reserves for all periods.

The reserves replacement ratio is calculated for a specified period utilizing the applicable proved oil-equivalent reserves additions divided by oil-equivalent production. The terms “resources” and “resource base” include quantities of discovered oil and gas that are not yet classified as proved reserves but that are expected to be ultimately recovered in the future. The term “resource base” is not intended to correspond to SEC definitions such as “probable” or “possible” reserves.‹