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Dec. 16, 2013, 10:34 AM
- Exxon Mobil (XOM +3.1%) breaks out to multi-week highs after shares are upgraded to Buy from Neutral at Goldman Sachs, which says XOM may be nearing inflection points in production growth and capital intensity.
- Goldman sees respective oil and boe volume growth of 5% and 2.4%, which would mark XOM's first year of organic growth since 2006; while upside risks to capex exist, the firm believes such concerns are well known by investors.
- On longer-term metrics, Goldman thinks XOM shares look inexpensive vs. the company's history on an absolute basis and relative to the S&P 500.
Dec. 13, 2013, 5:25 PM
- RBC Capital launches coverage of energy giants Exxon Mobil (XOM), which the firm says should trade at a higher multiple to the sector, and Chevron (CVX), which boasts high growth but capex and free cash risks.
- XOM, initiated with an Outperform rating and $105 target price, stands out as the prime source of free cash flow in the sector, which the firm sees as a key issue for investors; XOM "has a sustained record and corporate reputation for a tenacious focus on seeking competitive advantage and superior returns."
- CVX, started at Sector Perform and a $120 target, has above-average production growth, cash margins, and a healthy balance sheet, but its intense capital investment to drive growth leaves it with the largest negative free cash flows in the firm's coverage and moves it to more average gearing and returns.
Dec. 13, 2013, 3:43 PM
- ExxonMobil (XOM) appears set to pull out of exploration in Arctic waters off Greenland and was not among bidders in the country’s latest licensing round, with block awards likely to be issued soon, Upstream reports.
- Keen competition is expected for the frontier tracts which cover nearly 50K sq. km and estimated to hold potential resources of 31B boe; bidders believed to be in contention include BP, Shell (RDS.A, RDS.B), Chevron (CVX) and Statoil (STO), but XOM apparently will not participate.
- Despite the resource promise, the Greenland blocks would require spending of ~$500M on seismic surveys and drilling of up to two exploration wells.
Dec. 12, 2013, 12:19 PM
- Exxon's (XOM) annual energy outlook this year has a stark message: We are entering an era of abundance, and it’s time the U.S. started exporting oil.
- "We are not dealing with an era of scarcity" as was the case during the 1973 Arab oil embargo when the U.S. imposed restrictions on exporting domestic oil; "we need to rethink the regulatory scheme and the statutory scheme on the books."
- XOM is increasingly optimistic about how much oil can be recovered with today’s technology, predicting 65% of the world’s crude will be untapped by 2040.
- XOM forecasts global demand for gas will rise by 65% by 2040, with natural gas on track to supply 25% of global energy requirements; demand for coal will rise until 2025, but coal’s share of the global energy mix will fall from 25% today to below 20%.
Dec. 12, 2013, 10:25 AM
- Tucked away inside Chevron's (CVX -0.6%) announced $39.8B 2014 capex budget is another cost blowout on the development of its Gorgon LNG project in Australia: The latest estimated cost is $54B, vs. a $52B estimate offered a year ago and $37B when the final investment decision was taken in 2009.
- The timetable for first gas from Gorgon, which will have the capacity to produce 15.6M metric tons/year, slips to Q1 2015 from the original 2014 target.
- CVX says the project's economics remain attractive, following a sharp increase in oil prices since construction began; Gorgon's Asian customers are locked into contracts typically lasting 20 years that are linked to the fluctuating price of oil.
- Operator CVX owns 47.3% of Gorgon, while Shell (RDS.A, RDS.B) and Exxon Mobil (XOM) each hold 25%.
Dec. 9, 2013, 6:30 PM
- The U.S. is poised to become a net exporter of chemicals thanks to the shale oil boom, FT reports; the American Chemistry Council forecasts net U.S. chemical exports of ~$2.7B this year and expects exports to rise 45% over the next five years to nearly $30B by 2018.
- U.S. companies such as Exxon Mobil (XOM), Dow Chemical (DOW), Chevron (CVX) and Phillips 66 (PSX) are among the leaders in investing in new capacity, but even producers from Asia and the Middle East are looking at projects in the U.S.
- Dow's Andrew Liveris speaks for big companies that want curbs on U.S. exports of liquefied natural gas to ensure their energy cost advantage; with five LNG projects now approved for export sales by the Obama administration, "where they are right now seems to be fine," he says.
Dec. 7, 2013, 8:25 AM
- BofA Merrill Lynch is a more cautious buyer of stocks after this year's gains, and its top 10 large-cap stocks to buy for 2014 are mostly under-owned and unloved on Wall Street: ADM, Caterpillar (CAT), CenturyLink (CTL), Citigroup (C), Cisco (CSCO), DaVita (DVA), Exxon (XOM), GM, NextEra Energy (NEE) and Nucor (NUE).
- On CAT, the Lynch analysts point to high foreign sales prospects for 2014, and see strength in energy-related profits offsetting weakness in global mining; the firm has a $100 price target vs. ~$90 consensus.
- XOM is considered inexpensive compared to many large-cap energy names, it is expected to continue its large share buyback program and should increase the dividend; Lynch's target is $110 vs. $96 consensus.
- NUE is the ultimate contrarian play, as Wall Street is underwhelmed by steel stocks, but Lynch sees a rebound in commercial building as a big boost for 2014 earnings; the firm has a $60 target vs. $55 consensus.
Dec. 6, 2013, 9:59 AM
- Eni (E) CEO Paolo Scaroni doesn't expect the temporary stoppage of output at the giant Kashagan oil field to run into 2015, even as the consortium that runs it carries out tests after natural gas leaks.
- A prolonged halt at Kashagan, which has been plagued by years of delays and cost overruns, could be a drag on the finances of the consortium behind the project, which includes Eni, Exxon Mobil (XOM), Total (TOT) and Royal Dutch Shell (RDS.A, RDS.B).
- Scaroni also says Italy could produce up to 20% of its oil needs, but blames Italy's environmental regulations; he says that adopting regulations like those in force in Norway or the U.K. would allow Italy to double its domestic oil production.
Dec. 6, 2013, 3:08 AM
- Statoil (STO) and its JV partner ExxonMobil (XOM) make another big gas discovery off Tanzania - their fifth in the region - confirming Tanzania's emergence as a new energy region. The find, called Mronge-1, can be seen here.
- Today's find contains 2-3 trillion cubic feet (tcf) of gas, or 360-540 million barrels of oil equivalent (boe), bringing the total gas resources in the license the firms hold to 17-20 tcf or 3.06-3.6 billion boe.
- BG (BRGYY, BRGXF) and Ophir Energy (OPGYF) have also found gas off Tanzania. BG and Statoil are planning to build an LNG plant in Tanzania to ship the gas to Asia.
- STO operates the area on behalf of Tanzania Petroleum Development Corporation and owns a 65% stake; XOM owns the other 35%.
Dec. 5, 2013, 3:57 PM
- Exxon Mobil (XOM -0.4%) is downgraded to Outperform from Strong Buy at Raymond James, which expects a more limited upside for shares after rising 10% so far in Q4.
- The firm says the tactical rating change should not obscure its fundamentally constructive outlook on XOM in the context of its below consensus 2014 oil price forecast ($95/bbl for Brent, $83 for WTI).
- Although some of the easy money has been made, the firm thinks XOM is set to generate at least as much free cash flow in 2014 as in 2013, despite its lower oil price outlook and without allowing for any spending reductions.
Dec. 5, 2013, 8:38 AM
- More than two dozen of the biggest U.S. corporations, including the five major oil companies - Exxon (XOM), ConocoPhillips (COP), Chevron (CVX), BP and Shell (RDS.A, RDS.B) are planning their future growth on the expectation that the government will force them to pay a price for carbon pollution as a way to control global warming, NYT reports.
- Both supporters and opponents of action to fight global warming say the development is significant because businesses that chart a financial course to make money in a carbon-constrained future could be more inclined to support policies that address climate change.
- “Companies see that the trend is inevitable," says the president of environmental data company CDP.
Dec. 3, 2013, 9:49 AM
- Iraq is close to agreeing to lower production targets to peak output at the giant West Qurna-1 field, operated by Exxon Mobil (XOM), demonstrating the challenges global oil majors face in trying to raise goals for Iraq's big southern oil fields.
- The new target for West Qurna-1 will be 1.6M-1.8M bbl/day, more than a third lower than the current 2.8M bbl/day target, the Iraq oil minister says.
- The government also is said to be close to agreeing to lower production targets for two other major fields: Rumaila, operated by BP, and Majnoon, operated by Royal Dutch Shell (RDS.A, RDS.B).
Nov. 28, 2013, 4:34 AM
- Exxon Mobil (XOM) will today hand over a 25% stake in Iraq's West Qurna-1 oilfield project to PetroChina (PTR), Iraq's deputy prime minister for energy says. Exxon agreed to sell the holding in August.
- However, no mention was made of Indonesia's Pertamina, which is buying a 10% interest from Exxon. The latter owned 60% before the deals were agreed.
- Exxon is remaining the operator of the field.
Nov. 25, 2013, 4:03 PM
- The most popular shorts according to Goldman's Hedge Fund Monitor which analyzes the positions of 783 funds with $1.6T in assets (in reverse order, i.e. the last in this list is the most heavily shorted): SYY, KO, TGT, BMY, SNDK, UPS, SLB, GE, CVX, PFE, CAT, COP, EMC, PG, NFLX, WMT, JNJ, DIS, CRM, VZ, IBM, XOM, T, GILD, INTC.
- A quick scan finds Netflix making both the top 25 list of most heavily shorted and the top 20 list of most concentrated longs. List of 20 longs is here.
Nov. 21, 2013, 5:38 PM
- Turkey's government reportedly is preparing to set up an escrow account at a state-owned Turkish bank to collect proceeds from Kurdish energy sales, a move that would solve the main problem Iraqi Kurds face in cashing in on their abundant energy resources: paying firms such as Exxon (XOM) and Chevron (CVX).
- Though a quick resolution with the Iraq central government still looks difficult, the Kurdish energy minister says the Kurds wouldn't touch their net revenue until they hammered out a deal where profits could be merged with gains from all Iraqi oil shares and then redistributed.
- Until recently, the U.S. had resisted a Kurd-Turkey deal for fear of antagonizing Baghdad, but the progress has Washington's tone shifting.
Nov. 19, 2013, 1:32 PM
- Exxon (XOM -0.2%) "increasingly looks like a value trap," says Jim Chanos at the Reuters Summit. "For many of the oil majors, it is becoming increasingly difficult to finance buybacks and dividends as cash flows decline ... It isn't the same cash flow generating business it used to be."
- Of The Oracle, whose Berkshire Hathaway disclosed a 40M share stake in Exxon last week? "He's got his reasons but unmistakably the returns are dropping."
Exxon Mobil Corporation is engaged in energy, involving exploration for, and production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products.
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