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Exxon Mobil sees 2014 capex of $39.8B, down 6.4% from last year's peak

  • Exxon Mobil (XOM -1.4%) says it still expects to start production at a record 10 major projects this year, adding new capacity of ~300K boe/day, even as it plans to cut capital spending by ~6.4%.
  • XOM says at its annual investor meeting that it expects to spend $39.8B in 2014 on production projects and related expenses, down from a peak of $42.5B in 2013; expects capex excluding any potential acquisitions to average less than $37B/year from 2015-17.
  • Forecasts liquids production will increase 2% this year and 4% annually from 2015-17, and sees liquids and liquids linked natural gas accounting for 69% of total production by 2017.
  • Says it is pursuing more than 120 high-quality projects to develop ~24B oil equivalent barrels of oil and natural gas.
Comments (5)
  • dostoevsky228
    , contributor
    Comments (129) | Send Message
     
    This is all smoke and mirrors. Stock is currently down 2%! Flat production says it all, and belies the duplicity that T-Rex and all his high priced bell hops continue to stammer. Last year T-Rex said production would grow between 2014-2017...now 2014 is OUT, and it's 2015-2017!
    5 Mar, 10:07 AM Reply Like
  • Phenom1
    , contributor
    Comments (239) | Send Message
     
    Sounds unreasonably harsh. Whoa, down 2%, hit that sell button. The nature of the business means that mega-projects often incur short delays, and that capex is paid out years before production comes on line. This self-flagellation induced by hyperventilating analysts and their followers smells to me like a great buying opportunity. The buy-write with the Jan 95 call option is likely to produce its maximum 10% annualized ROR. Add-in a divvy increase next month, and you have XOM assets underwriting a return better than most high yield bonds.
    5 Mar, 11:23 AM Reply Like
  • dostoevsky228
    , contributor
    Comments (129) | Send Message
     
    True on the high yield bond comment, that is not singular to XOM, plenty of stocks fit that criteria. My comments are as a long holding XOM shareholder. T-Rex is no Lee Raymond, and my opinion, has been a poor CEO. The XTO merger is his singular moment, and that has been fair to disastrous, even he admits that. They have spewed this production increase scenario for years now, yet 11/12 recent quarters have seen production declines, with yesterday's "Flat" news charring analyst's. Their dividend is solid, secure, NO arguments, but it severely lags ALL majors and has for 10 years. They use to be the smartest gang in the room, and their hubris is now becoming a liability.
    6 Mar, 10:25 AM Reply Like
  • Phenom1
    , contributor
    Comments (239) | Send Message
     
    I agree on the Rex-Lee comparison, but am not sure that in today's global environment, another CEO could have done better (ex-XTO, which I still feel will play out in the long run). You don't get a chance to buy an XTO every day like a carton of milk in the supermarket.

     

    I do think that he has failed us in that he either (1) has knowingly used poor forecast numbers; or, (2) has not demanded a stricter methodology from his lieutenants who provide his data.

     

    I disagree with your glib assertion that "plenty of stocks fit that criteria".

     

    I challenge you to identify just three other stocks that provide, as you say, a 100% secure dividend, and still allow you to write a 2% out of the money call that can return 10.6% annualized in 9 or 10 months. Please, make my day! And don't bother with CVX, I've already checked, it falls more than a full percentage point short.
    7 Mar, 01:20 PM Reply Like
  • elcid16
    , contributor
    Comments (109) | Send Message
     
    "CapEx" and "production projects and related expenses" are two different things.

     

    CapEx in 2013 wasn't $42.5B, it was closer to $33B.

     

    Comparatively, CapEx in 2014 won't be $39.8B. It will probably be closer to $30B.

     

    In short, your headline is incorrect.
    5 Mar, 11:25 AM Reply Like
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