Our new estimate of total present value of $500 billion is supported by reserve life and cash flow projections after taking into account fourth quarter 2006 results reported on February 1. Prospects could be further strengthened if oil for delivery over the next six years, priced currently at $63 a barrel, resumes an uptrend by crossing above the 40-week average later in 2007 (see chart, Six-Year Commodity Price Meter, below).
Downstream profits, though volatile, are projected at the same level as for the past four quarters. Stock price above a rising 200-day average suggests growing investor interest. We favor XOM stock at a full weighting in our illustrative energy portfolio concentrated on real assets that promise a high return providing clean fuel for global growth.
