Exxon Remains A Solid Long-Term Buy

| About: Exxon Mobil (XOM)

Not surprisingly, Exxon Mobil (NYSE:XOM) still remains king of the mountain in the oil and gas market. The company continues to amaze by placing extreme efforts in the exploration and production of crude oil and natural gas. Exxon Mobil's acquisition of Texas-based natural gas producer XTO Energy of Fort Worth back in 2010 made the giant look even larger in the natural gas arena. The company continues to seek the gas even as natural gas prices stutter toward a rebound, but not at any cost.

The company is large enough, smart enough, and experienced enough to know when to cut losses and when to continue exploration. Recently, Exxon Mobil ended its project in Poland, cutting off its exploration for shale gas after finding insufficient amounts of gas in two exploratory wells in the country's east region. With not much to fear from rivals Chevron (NYSE:CVX), Shell (NYSE:RDS.A), BP (NYSE:BP), and ConocoPhillips (NYSE:COP), Exxon Mobil has the capital, the mobility, and an almost unlimited list of resources to help the company make new finds while capitalizing on existing plays. For these reasons alone, I believe the company to be one to buy now and then hold on for an exciting, profitable ride.

The company is always on the lookout for new partnerships and joint ventures to strengthen its search for new plays in both oil and gas. Exxon Mobil and Russian oil and gas company Rosneft have had its share of headlines based on a rocky relationship, but the two recently, as part of an effort to find new regions of operation and explore the potential of difficult-to-produce reserves, agreed to develop tight oil reserves in Western Siberia and open a research center. The two will expand their efforts to develop oil reserves in low-permeability formations in Western Siberia using technology advancements that Exxon Mobil has successfully deployed in North America.

The geological studies and exploratory drilling is expected to begin in 2013 and will be funded by Exxon Mobil. The research center, the Arctic Research Center for Offshore Developments, will provide services to support all stages of oil and gas development on the Arctic shelf, including structures and Arctic pipelines as well as the design of ice resistant offshore vessels. The exploration and the research center are both part of an agreement sign by the two companies last August.

Another partnership that is advancing the use of Exxon Mobil's products is the one between the company and the Massachusetts State Police. In this six-year partnership agreement, a division of Exxon Mobil, Exxon Mobil Lubricants and Petroleum Specialties, will become the sole lubricant provider for the entire 2,500-vehicle fleet of the State Police. The Massachusetts State Police had worked with Exxon Mobil engineers for the past four years to establish the new fleet efficiency program. The engineers examined the police department's vehicles and equipment and were able to recommend appropriate lubricants for each vehicle including the Mobil 1 product that is valid for up to a 10,000 mile oil change. Exxon Mobil is using this partnership as a test demonstrating protection against engine wear in some of the most extreme conditions.

As the largest U.S. natural gas producer, Exxon Mobil has been aggressively seeking even more plays in this category. Since its acquisition of XTO for $34.9 billion, the company has spent another $3 billion gobbling up shale leases that hold more than 10 trillion cubic feet of gas in Arkansas, Louisiana, and Texas. Playing on its leverage of natural gas holdings, the company expanded its holdings even further with the purchase of two Pennsylvania companies: Phillips Resources, based in Warrendale, Pennsylvania, and TWP of Butler, Pennsylvania for the cost of $1.69 billion. These acquisitions give Exxon Mobil access to 317,000 acres in the gas-rich geological formation of the Marcellus Shale that stretches beneath several eastern states including New York, Pennsylvania and West Virginia.

Exxon Mobil's XTO unit will manage Phillips Resources and TWP, which combined held reserves equivalent to 228 billion cubic feet of gas at the end of 2010. Some rivals such as Chesapeake (NYSE:CHK) and Total (NYSE:TOT) are also seeking to expand their gas holdings through acquisitions. While critics complain that natural gas is not the energy source to be chasing after right now and as more and more oil and gas companies have switched focus from gas to oil, Exxon Mobil defends its strategy.

In a recent interview, CEO Rex Tillerson says he has no regrets on the timing of the 2010 purchase of natural-gas drilling company XTO Energy. ""We anticipated prices would deteriorate at the time, we could see the overhang. The one thing we didn't anticipate was the sluggish economic recovery. But that's a transient condition. We're not good enough to call investments on one- and two-year time frames. It's really about a 20- to 30-year view, and on that basis we're pleased with it."

Exxon Mobil continues to shine with good, solid growth and a strategy that will bring in higher profits as natural gas prices turn around. The company reported first quarter 2012 earnings of $2 per share, and reported annual 2011 earnings of $8.42 per share. The company had first quarter 2012 revenues of $124.05 billion, which was 2.01% above the prior year's first quarter results, and had revenues for the full year 2011 of $486.43 billion, 26.93% above the prior year's results.

The company's very long term view helps it to set goals and standards that others may be blind to. Ignoring the short term with an eye toward what can be achieved over ten, twenty, and thirty years, keeps Exxon Mobil strategically ahead of any competition. It is with this far off horizon outlook that I can strongly recommend this company as a buy now without ever looking back.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.