Yesterday, 5:54 PM
- Guyana's government says Exxon Mobil (NYSE:XOM) will start exploration drilling at the Stabroek Block off its coast, in a move that could inflame a long-running dispute with neighboring Venezuela.
- Officials say the country's president met XOM representative in the capital this week and the company's exploration rig ship is now in position at the concession area.
- The waters lie off a border region claimed by Venezuela in a territorial controversy dating back more than a century.
Yesterday, 2:14 PM
- New Jersey officially announces a $225M settlement with Exxon Mobil (XOM -0.3%) that state officials say is the largest environmental settlement in state history, but it is criticized for totaling a mere fraction of the nearly $9B initially sought.
- The state AG's office says the settlement over refinery sites in Linden and Bayonne is separate from XOM's obligation to clean up the sites at its own expense.
- A NYT story yesterday suggested that the state's 11-year battle for damages resulted in the settlement only when Gov. Christie's chief counsel became involved.
- The decision to settle for "roughly three cents on the dollar" after years of litigation is an "embarrassment," writes Bradley Campbell, commissioner of the state's Department of Environmental Protection when the case was filed in 2004.
- Legislators and environmentalists are calling for investigations and rejection of the deal.
Yesterday, 11:28 AM
- Exxon Mobil (XOM -0.5%), with $17.9B in free cash flow to end 2014, is under much less pressure to cut spending than smaller rivals, which are coming under varying degrees of financial strain amid lower oil prices; 2015 capex is being cut by 12%, a striking display of stability when compared to 30%-40% capex cuts generally announced by small and midsized E&P companies.
- CEO Rex Tillerson says being able to keep spending at rates that others can't provides XOM "a whole lot of different kinds of opportunities” in two main areas: cutting costs and acquiring assets.
- On acquisitions, Tillerson’s comment that “there really is no limitation on what we might be interested in or considering" in terms of possible deals suggests he is prepared to be ambitious.
- While a rumored bid for BP is not impossible, most analysts are doubtful due to the political sensitivities of such a deal and uncertainty about liabilities from the 2010 Gulf of Mexico oil spill; Wolfe Research's Paul Sankey thinks XOM is most interested in a U.S.-focused midsized oil company, with “key potential targets” including HES, CLR, DVN, APA and APC.
Wed, Mar. 4, 6:08 PM
- A New York district court has rejected Venezuela's bid to reduce interest on a $1.6B award that an international tribunal had ordered it to pay Exxon Mobil (NYSE:XOM) as compensation for nationalizations.
- Venezuela had sought revisions or an outright annulment to the decision by the International Centre for Settlement of Investment Disputes.
- The cash-strapped country is facing at least 20 major arbitration awards, most stemming from nationalizations during Hugo Chavez's time as president.
Wed, Mar. 4, 2:22 PM
- "People kinda need to settle in for a while,” CEO Rex Tillerson said at Exxon Mobil’s (XOM -0.5%) annual investor conference in New York today, expecting crude oil prices to remain low for at least the next two years because of ample global supplies and relatively weak economic growth.
- "There’s a lot of supply out there, and I don’t see a particularly healthy economy," the CEO says.
- In outlining its business plans through 2017, XOM assumes a price of $55/bbl, $5 below where Brent crude is trading today and about half of what Brent averaged between 2011 and the middle of last year.
- Tillerson says XOM projects that will add production through 2017 are basically fully funded, but beyond that some investment decisions may be delayed if low prices persist.
- XOM says the startup of Hadrian South in the U.S. Gulf of Mexico, the expansion of the Kearl oil sands project in Canada and deepwater expansion projects in Nigeria and Angola will add to production this year.
- XOM also aims to squeeze out more oil and gas while keeping its budget in check, and the CEO says one way it will do this is by negotiating better terms for itself, telling analysts that it expects lower contractor fees from oil services firms.
Wed, Mar. 4, 11:22 AM
- Kinder Morgan (KMI -0.6%) wants to drill through Burnaby Mountain in British Columbia to reach an oil-loading ship terminal, but WSJ reports that it is facing more challenges than the mountain itself, as it also is battling resistance from Vancouver officials and protestors opposed to fossil fuel development.
- Burnaby Mountain has become a symbolic battlefield in a much larger debate about energy resources in North America, opponents and supporters of the pipeline plan say.
- Canadian oil producers are counting on KMI’s $4.3B proposal to triple the capacity of the existing Trans Mountain pipeline, which connects Alberta’s oil sands to a Pacific coast terminal, as the fate of the Keystone XL pipeline remains in limbo.
- More than a dozen oil companies have binding deals for up to 20 years with the pipeline, including Exxon (NYSE:XOM) affiliate Imperial Oil (NYSEMKT:IMO), Cenovus Energy (NYSE:CVE) and Canadian Natural Resources (NYSE:CNQ), who view the project as a vital link to new markets in Asia.
Wed, Mar. 4, 9:14 AM
- Exxon Mobil (NYSE:XOM) says in its analyst day presentation that its free cash flow grew to $17.9B in 2014, up from $10.6B in 2013, and that 2014 capex came in $1.3B below plan at $38.5B.
- XOM says it achieved its upstream production target of 4M boe/day and expects 2% output growth in 2015 to 4.1M boe/day, driven by a 7% increase in liquids, and says it is on track to deliver 4.3M boe/day in 2017 as accretive new volumes more than offset declines; says it improved profitability in 2014 by $1.44/bbl.
- XOM says it has 16 projects online, adding more than 550K boe/day working interest capacity, and sees bringing another 16 projects online by 2017.
- Reaffirms expectations for 2015 capex of $34B (earlier), 11% less than 2014, and expects capex to average less than $34B/year in 2016 and 2017.
- XOM +0.2% premarket.
Tue, Mar. 3, 12:48 PM
- Exxon Mobil (XOM -0.3%) was forced to shut down a Russian Arctic drilling project by U.S. and European Union sanctions, it is taking the long view and staking claims to areas that could yield tens of billions of barrels in coming decades.
- XOM boosted its Russian holdings to 63.7M acres in 2014 from 11.4M at the end of 2014, dwarfing the 14.6M acres of rights it holds in the U.S., which until last year was its largest exploration prospect.
- The bet on Russia follows a string of drilling failures elsewhere and spending cuts that will likely be addressed in CEO Rex Tillerson’s investor meeting tomorrow.
- Worldwide, XOM’s exploration failure rate worsened last year to 39% from 33% in 2013, and had dry holes in two-thirds of the regions in which it operates; also, its costs to extract a barrel of crude from the ground rose 9.3% to a global average of $12.55.
Tue, Mar. 3, 11:38 AM
- Exxon Mobil (XOM -0.9%) plans to sell as much as $7B of bonds in what would be its largest ever debt deal and the biggest energy-related offering since the plunge in crude prices, Bloomberg reports.
- XOM may issue the securities in as many as eight parts, with the longest maturity portion in 30-year notes that are expected to yield ~90 bps more than comparable Treasury notes, according to the report.
- XOM last issued bonds a year ago, when it sold $5.5B in its biggest offering to date and its first deal since 1993.
Tue, Mar. 3, 10:28 AM
- Exxon Mobil (XOM -0.8%) needs oil at $85/bbl to cover its capex and dividend, Oppenheimer says in a new research note, but Deutsche Bank believes XOM's cash flow issues are not as bad as feared.
- Oppenheimer expects XOM to generate earnings of $14.7B this year and $19.3B next year, with operating cash flow of $34.3B and $39.7B; based on capital spending of $34B and $11.5B annual cash dividend, the firm sees XOM facing free cash flow shortfalls, before share buybacks, of $9B-plus this year and next, to be funded from additional borrowing and proceeds from asset sales.
- However, Deutsche Bank believes cash flow fears at XOM and Cheveron (NYSE:CVX) are overstated, seeing the significant roll-off in project spending and U.S. onshore flexibility driving significant medium-term capex deflation with limited near-term portfolio impact.
Tue, Mar. 3, 7:49 AM
- Chevron (NYSE:CVX) and partners win the support of Western Australia state's environmental regulator for a plan to expand capacity at the giant Gorgon liquefied natural gas export project by a third to 20M tons/year by eventually building a fourth processing unit.
- The expansion plan, which also needs approval by state and federal environment ministers, does not guarantee construction will go ahead, as developers of Australian energy projects have been scaling back or deferring plans following the plunge in world energy prices.
- But construction of Gorgon's $54B first stage is more than 90% complete and the venture, which also counts Exxon Mobil (NYSE:XOM) and Royal Dutch Shell (RDS.A, RDS.B) as significant shareholders, is due to ship its first LNG cargo later this year.
Mon, Mar. 2, 7:35 PM
- The crude oil aboard the train that derailed and exploded two weeks ago in West Virginia contained so much combustible gas that it would have been barred from rail transport under safety regulations set to go into effect next month, WSJ reports.
- The oil’s vapor pressure was 13.9 psi, which exceeds the limit of 13.7 psi that North Dakota is set to impose in April on oil moving by truck or rail from the Bakken Shale.
- Plains All American Pipeline (NYSE:PAA), which shipped the oil, says it follows regulations governing the shipping and testing of crude; CSX, the railroad that carried the oil, says it had stepped up its inspections of the track along the route.
- The new information about the West Virginia accident likely will increase regulators’ focus on the makeup of oil being shipped by train; oil from sahle formations is known to contain far more combustible gas than traditional crude oil, which has a vapor pressure of ~6 psi.
- Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
Mon, Mar. 2, 3:19 PM
- The Dutch government apologizes for ignoring risks posed by earthquakes caused by production of natural gas from the Groningen field, following a report last month by the country's safety board that found the government, together with Royal Dutch Shell (RDS.A, RDS.B) and Exxon Mobil (NYSE:XOM), had put profits before safety in exploiting the field.
- The economic minister has ordered production at Gronignen to be cut by 16% for H1 2015, with another decision on production at the field expected on July 1.
- The Groningen field accounts for two-thirds of Dutch gas production, and the Netherlands supplies ~15% of Europe's total natural gas, providing an important alternative for Russian gas.
Fri, Feb. 27, 6:32 PM
- Exxon Mobil (NYSE:XOM) has been a strong relative performer since the oil price swoon, but Jefferies analysts see Chevron (NYSE:CVX) and Royal Dutch Shell (RDS.A, RDS.B) as better investor options right now.
- Jefferies does not expect XOM's March 4 analyst day will offer reasons to own the stock, and if capex guidance exceeds expectations and the share buyback program is eliminated, it could make the market question XOM's defensive qualities.
- The firm prefers CVX over an 18-month period due to its superior growth, although it suggests holding off until after the company's March 10 analyst meeting; CVX trades at a 29% EV/DACF discount to XOM on its 2016 estimates.
- Jefferies likes Shell as a defensive stock within the sector, saying its cash cycle and balance sheet are just as strong as XOM and it trades at a 42% EV/DACF discount vs. XOM on its 2016 estimates.
Fri, Feb. 27, 2:15 PM
- Exxon Mobil (XOM +0.4%) reaches a settlement with the state of New Jersey, agreeing to pay $250M in damages for the contamination of wetlands caused by two refineries, NYT reports.
- Lawsuits were first filed in 2004 by New Jersey's environmental protection agency and finally made their way to trial last year; the state had been seeking $2.6B for the primary restoration of the wetlands sites and an additional $6.3B for compensatory damages.
- The parties have not announced the deal publicly, and it still must be approved by the judge, but followers of the case did not know why New Jersey would suddenly settle a case that it had fought strenuously for more than a decade.
Thu, Feb. 26, 4:57 PM
- Exxon Mobil (NYSE:XOM) says spending will decline ~11% this year to $34B due to plunging oil prices, following a 9% drop in spending during 2014 to $38.5B from the company's all-time spending peak of $42.5B in 2013, according to its latest 10-K.
- XOM says in the filing that $1B is its maximum exposure to a loss related to compliance with the sanctions the U.S. and the European Union imposed on Russia.
- Details of XOM's investment plans are due next Wednesday when the company holds its annual meeting with analysts in New York.
XOM vs. ETF Alternatives
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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