Exxon Mobil: It's All About Free Cash Flow
Richard Zeits • 86 Comments
Richard Zeits • 86 Comments
Exxon Mobil: Slow But Steady, Value Erosion Is Underway
Richard Zeits • 111 Comments
Richard Zeits • 111 Comments
Fri, Sep. 23, 12:48 PM
- via Bloomberg
- Exxon (NYSE:XOM) hasn't yet started a formal business process, but has had talks with potential buyers for some of the oil fields it operates in Norway's North Sea. The company's Norway fields produced the equivalent of 64K barrels of oil per day last year, according to the Exxon website.
- Exxon's move is yet another sign the majors are losing at least some interest in Norway, where oil production has halved since peaking in 2000.
Wed, Sep. 21, 10:47 PM
- ConocoPhillips (NYSE:COP) and Alaska's state-owned gas corporation say they are in negotiations to form a joint venture aimed at marketing North Slope natural gas to utilities outside the state.
- COP and the state are inviting BP and ExxonMobil (NYSE:XOM), the two other major slope gas owners, to join the group.
- The initiative for the new marketing group sidesteps failed commercial negotiations last year among the four parties - the three companies and the state corporation - in the Alaska LNG project, which involves an 800-mile gas pipeline and large export facility.
Wed, Sep. 21, 12:41 PM
- ExxonMobil (XOM +0.1%) agrees to pay a $12M settlement related to environmental damages caused by a 2011 pipeline break that spilled 63K gallons of crude oil into Montana's Yellowstone River.
- Montana will receive $9.5M from the settlement, and the U.S. government will get $2.5M.
- The payment settles claims from the U.S. and state governments that the 2011 spill harmed natural resources as it fouled an 85-mile stretch of the river.
- XOM previously has said it spent $135M on cleanup and repair work, although penalties against the company for federal Clean Water Act violations have not yet been levied, and an EPA investigation continues.
Wed, Sep. 21, 11:32 AM
- Saying there may be "some smoke but likely no fire," Wells Fargo analysts rate the likelihood of a negative outcome from a reported SEC investigation into ExxonMobil’s (XOM -0.1%) accounting and climate practices as very slight.
- XOM has long been conservative on when and how much is capitalized, and its returns on capital employed have consistently outperformed its peers, which is a harder performance to deliver without write-downs, Wells says.
- But the firm sees the headline risks associated with the SEC probe creating enough investor angst to damage XOM’s reputation and impact its share price performance during the investigation period; while maintaining its Outperform rating, Wells cuts its valuation range on the shares to $93-$103 from $103-$114.
Wed, Sep. 21, 4:25 AM
- The DOJ will join officials from Montana at 10:30 a.m. ET to announce a "significant development" toward restoring natural resources damaged by a crude oil spill from a pipeline owned by Exxon Mobil (NYSE:XOM).
- In 2011, the company's 40K barrel-per-day Silvertip pipeline in Montana ruptured underneath the Yellowstone River, releasing more than 1K barrels of crude and costing the company about $135M to clean up.
Tue, Sep. 20, 6:19 PM
- InterOil (NYSE:IOC) founder and ex-CEO Phil Mulacek concedes that most of the company’s shareholders will vote in favor of ExxonMobil’s (NYSE:XOM) acquisition tomorrow.
- Mulacek objected to XOM’s bid when it was announced in July, saying IOC directors should have pressed for a better deal, and says that during the final months of his time as CEO, negotiations were underway with XOM over an offer that was 3x higher than the current deal.
- Under the July deal, XOM agreed to pay $45-$71.87/share, depending on how much gas in IOC's Elk-Antelope field, which prompted Mulacek to rip into IOC directors as “incompetents” who “ripped off shareholders.”
Tue, Sep. 20, 2:20 PM
- Exxon Mobil (XOM -0.8%) is the subject of an SEC investigation over its accounting methods related to asset valuation, and how it calculates the impact of climate change on its business, WSJ reports.
- The SEC has sought information and documents from XOM as well as auditor PricewaterhouseCoopers, and has been receiving documents that the company submitted as part of the probe into similar issues by New York's attorney general's office, according to the report.
- The probe may signal the opening of a new front of climate-related regulation and enforcement at the SEC, which would have far-reaching implications for the oil and gas industry.
Fri, Sep. 16, 12:16 PM
- The Dutch parliament adopted a motion yesterday to review production at the Groningen gas field annually in a bid to determine whether output can be reduced further.
- In June, the government capped production at 24B cm/year for the coming five years, but the new motion opens the door to further reductions.
- Output from Europe's largest gas field has been cut in half over the past two years after the country's Safety Board said the government was failing to protect citizens from earthquakes triggered by gas exploitation.
- The Groningen field is operated by a joint venture between Royal Dutch Shell (RDS.A, RDS.B) and Exxon Mobil (NYSE:XOM).
Fri, Sep. 16, 6:14 AM
- Eric Schneiderman is investigating why Exxon Mobil (NYSE:XOM) hasn't written down the value of its assets, two years into a pronounced crash in oil prices.
- The New York Attorney General, who has been probing the firm's past knowledge of the impact of climate change, is also examining its accounting practices, sources told WSJ.
- While a company spokesman declined to comment, he said Exxon followed all rules and regulations.
- XOM -1.3% premarket
Wed, Sep. 14, 9:57 AM
- ExxonMobil (XOM -0.1%) reportedly will resume shipments of Qua Iboe crude, Nigeria's largest grade of crude oil, in October, three months after it had declared force majeure on the exports of the grade.
- It is not clear if the pipeline has been repaired or if XOM expects it to be back on stream in time to load crude in October.
- XOM declared force majeure on the Nigerian grade after a “system anomaly” was noted during a routine check of its loading facility on July 14.
- Qua Iboe averaged ~340K bbl/day in shipments last year.
Tue, Sep. 13, 8:31 AM
- Demand for gas from the Groningen field in the Netherlands will fall sharply from 2020 as production is reduced, Economy Minister Kamp says in a letter to the Dutch parliament.
- The Netherlands has been forced to scale back production at Groningen, which once supplied 10% of European Union gas requirements, to 24B cm/year due to damage from earthquakes.
- Groningen is operated by a joint venture between Royal Dutch Shell (RDS.A, RDS.B) and ExxonMobil (NYSE:XOM).
Mon, Sep. 12, 11:25 AM
- Qatar Petroleum is interested in Eni's (E -1%) Mozambique gas business, and could decide to join ExxonMobil (XOM +0.2%) in buying a multibillion-dollar stake, Reuters reports.
- Qatar Petroleum is in talks with XOM and Eni on some kind of involvement in Mozambique which could involve a joint investment with the U.S. company, although not a classic joint venture structure, according to the report.
- Reuters reported last month that XOM had reached a deal that could give it an operating stake in the onshore liquefied natural gas export plant while leaving Eni in control of the Area 4 gas fields feeding it; Area 4 is one of the biggest discoveries of recent years, holding ~85T cf of gas.
Mon, Sep. 12, 8:01 AM
- ExxonMobil (NYSE:XOM) and Oil Search (OTCPK:OISHY), partners in a gas-export venture in Papua New Guinea, each agree to acquire 40% interests in two exploration licenses from a company controlled by China’s Cnooc (NYSE:CEO) for an undisclosed sum.
- The licenses cover nearly 25K combined sq. km in water depths of as much as 2,500 meters.
- Oil Search says a comprehensive study of exploration opportunities in 2015 and 2016 had identified the offshore Gulf of Papua as a area of significant natural gas potential.
Fri, Sep. 9, 5:56 PM
- Imperial Oil (NYSEMKT:IMO) says it is seeking a buyer for its interests in the Norman Wells oilfield in Canada's Northwest Territories, as it focuses on its largest business farther south.
- IMO, which is majority owned by ExxonMobil (NYSE:XOM), says it plans to market the 11K bbl/day field as well as an associated fuel distribution center during the current quarter.
- IMO began drilling for oil in Norman Wells, a town ~100 miles south of the Arctic Circle, in 1920.
Fri, Sep. 9, 10:18 AM
- Drilling operations at ExxonMobil’s (XOM -1.1%) Skipjack prospect, the company's third exploratory well in the Stabroek Block offshore Guyana, have failed to hit commercial hydrocarbons.
- XOM had hoped to hit another jackpot similar to its nearby Liza well, which has a declared capacity of ~1B boe.
- Earlier comments by execs at XOM partner Hess suggested that the Stabroek block could contain more than 20 structures with similar attributes as Liza.
Tue, Sep. 6, 11:40 AM
- August monthly performance was: -1.5%
- 52-week performance vs. the S&P 500 is: +9%
- $0.18 in dividends were paid in August
- Top 10 Holdings as of 7/29/2016: AT&T Inc (T): 5.5853%, Exxon Mobil Corp (XOM): 5.12068%, Verizon Communications Inc (VZ): 4.31268%, Chevron Corp (CVX): 3.62281%, General Electric Co (GE): 3.38972%, Pfizer Inc (PFE): 3.01797%, Procter & Gamble Co (PG): 3.0115%, Wal-Mart Stores Inc (WMT): 2.93033%, Philip Morris International Inc (PM): 2.78531%, International Business Machines Corp (IBM): 2.28424%