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Exxon Mobil Corporation (XOM)

  • Thu, Oct. 1, 4:57 PM
    • Exxon Mobil (NYSE:XOM) is fined $2.63M by the U.S. Pipeline and Hazardous Materials Safety Administration for spilling crude oil in an Arkansas residential area in 2013.
    • The Pegasus pipeline spilled ~5K barrels of oil in a residential neighborhood near Mayflower, Ark., and the agency tells XOM in a letter that when the civil penalty is paid and terms of a compliance order are completed, the enforcement matter will be closed.
    | Thu, Oct. 1, 4:57 PM | 10 Comments
  • Thu, Oct. 1, 12:58 PM
    • Alaska's government reaches a tentative agreement with the North Slope’s three major producers - Exxon Mobil (XOM -1.1%), ConocoPhillips (COP -0.3%) and BP (BP +0.9%) - over payments for impacts on communities during the construction of a proposed major gas project and property taxes once gas starts to flow.
    • The deal calls for $800M in payments for impacts occurring during construction, with an expected payout over five years, which could include additional police, teachers and wage inflation; the agreement also has a targeted amount of $15.7B for a flow-related property tax paid out over 25 years.
    • An XOM spokesperson says the tentative agreement is an important step toward advancing the project.
    • Gov. Walker has called a special session for late October to consider buying out TransCanada’s (TRP +0.2%) position in the project, as well as a reserve tax on undeveloped North Slope gas; no decision has been made yet on whether to build the project, which oil-dependent Alaska sees as critical to its economic future.
    | Thu, Oct. 1, 12:58 PM | 19 Comments
  • Wed, Sep. 30, 4:45 PM
    • PBF Energy (NYSE:PBF+8% AH after agreeing to acquire the 155K bbl/day Torrance, Calif., refinery and related logistics assets from Exxon Mobil (NYSE:XOM) for $537M.
    • The refinery has been shut down since an explosion in February injured four contractors and caused heavy damage, leading to a shortage of gasoline and higher prices at the pump for drivers in California.
    • The Torrance refinery provides 10% of the state’s capacity and 20% of the capacity in Southern California, and the explosion forced XOM to cut production to less than 20%, causing the spike in gas prices.
    • PBF says the refinery will be restored to full working order prior to close, and expects the deal to be immediately accretive to earnings.
    • Coupled with its previously announced Chalmette acquisition, PBF says it will have increased its refining capacity by more than 60% to ~900K bbl/day and added meaningful Gulf coast and west coast assets to its refining system.
    | Wed, Sep. 30, 4:45 PM | 13 Comments
  • Mon, Sep. 28, 7:19 PM
    • Alaska wants to pivot towards liquefied natural gas as oil production slowly declines, and is trying to tackle a massive natural gas pipeline and LNG project that is stuck on the drawing board, but Exxon Mobil (NYSE:XOM) CEO Rex Tillerson says the state has been its "own worst enemy" in handling the project.
    • "Every governor that comes in decides they’ve got a different way of doing this, which is why it never happens," Tillerson says. "You can’t take a project that is going to take 5, 6, 7 years to execute and require $50B-$60B of capital and decide every two years you’ve got a different way to do it."
    • Alaska's Gov. Walker, soon after he was elected last year, first proposed a competing project to the one currently under consideration; after abandoning that idea, he wants the state to pick up TransCanada’s (NYSE:TRP) stake and finance it with state resources, an option that apparently does not sit well with Tillerson.
    • With a large and growing budget deficit, the project "has gone from a wish-list item to a must-have,” says Walker, who has summoned a special session of the legislature to begin Oct. 24; the state's serious fiscal woes will put pressure on lawmakers when they meet to discuss the project.
    • BP and ConocoPhillips {COP} also are partners in the project.
    | Mon, Sep. 28, 7:19 PM | 9 Comments
  • Mon, Sep. 28, 9:58 AM
    • Venezuela and Guyana agree to restore their respective ambassadors, in a first step toward easing tensions that flared after Exxon Mobil's (XOM -0.2%) recent discovery of oil off the coast of a disputed territory.
    • Venezuela withdrew its ambassador to Guyana in July after demanding a halt to exploration by XOM off the disputed region, and later halted accreditation for Guyana's ambassador to Venezuela.
    • XOM in May said it found oil in the Stabroek block under a license granted by Guyana's government but has stayed silent on the dispute.
    | Mon, Sep. 28, 9:58 AM | Comment!
  • Thu, Sep. 24, 7:15 PM
    • North Dakota regulators approve an industry-backed proposal to delay further cuts to associated gas flaring by 10 months while also easing more long-range flaring reduction targets.
    • Gov. Dalrymple and the two other members of the North Dakota Industrial Commission voted to change the date when companies must capture 85% of natural gas produced from their wells to Nov. 1, 2016.
    • The regulators agreed with industry arguments that the delays and revisions were needed because of the lack of new gas capture and pipeline infrastructure, which have been delayed for a variety of reasons, including low oil and gas prices, right-of-way disputes and pad size limitations.
    • Top North Dakota producers include CLR, HES, EOG, WLL, XOM, OAS, NOG, EOX, MRO
    | Thu, Sep. 24, 7:15 PM | 42 Comments
  • Thu, Sep. 24, 6:41 PM
    • Cowen analyst Sam Margolin worries about Exxon Mobil’s (NYSE:XOM) exposure to oil sands through its 70%-owned Canadian subsidiary Imperial Oil (NYSEMKT:IMO), with bitumen accounting for 19% of IMO's reserves, but he still sees option value in the oil sands business, providing leverage to a long-term price recovery.
    • Given XOM's overall defensive characteristics of the production profile and its cash flow balance, Margolin says he does not see challenged Canadian oil sands economics as single-handedly destructive to the business.
    • XOM's "overall narrower bridge to [cash flow] neutrality... establishes it as a quality defensive play in a lower commodity price environment," Margolin writes as he reiterates his Outperform rating and $92 price target on the stock.
    | Thu, Sep. 24, 6:41 PM | 4 Comments
  • Wed, Sep. 23, 6:45 PM
    • New technology has the potential to more than double production from a series of proposed projects in Canada's oil sands, Imperial Oil (NYSEMKT:IMO) CEO Rich Krüger says, an optimistic view of high-cost heavy oil operations even as they face falling investment and slumping crude oil prices.
    • The head man at Exxon's (NYSE:XOM) Canadian subsidiary says pilot tests show a nearly 30% increase in production using a modified version of IMO's steam-assisted gravity drainage, an innovation that could help boost output from each of at least seven proposed oil sands well projects to 55K-75K bbl/day in crude production, up from 30K-40K bl/day at current generation well sites.
    • Aspen, the first of the planned projects, could start as soon as 2020, but Krüger says IMO has yet to approve it amid evaluations of the business case for it and the others, each of which would cost ~C$2B to develop.
    | Wed, Sep. 23, 6:45 PM | 28 Comments
  • Wed, Sep. 23, 11:31 AM
    • Investors should “position themselves defensively” in the global oil supermajor sector, Macquarie analyst Iain Reed believes, foreseeing a slow oil price recovery with a risk of the 1985-90 slump repeating itself.
    • The situation is not likely to have a positive impact on most of the supermajors, particularly in the upstream divisions of the companies, where earnings have been eroded years of significant cost inflation, Reed says.
    • The analyst thinks Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) should be avoided, rating both stocks at Underperform; XOM is trading at an unjustified premium valuation, Reed says, and CVX's performance likely will be restricted by the slow oil price recovery.
    • Reed rates Total (NYSE:TOT) and Royal Dutch Shell (RDS.A, RDS.B) with Outperform ratings, seeing TOT as a first mover in cost reduction and production growth, and Shell as an underperformer.
    | Wed, Sep. 23, 11:31 AM | 53 Comments
  • Wed, Sep. 23, 10:42 AM
    • Exxon Mobil (XOM +0.3%) has decided to abandon short-term repairs to its Torrance, Calif., refinery in favor of a longer-term approach that would bring the plant back to full capacity next February, oil industry analyst Bob van der Valk tells the Los Angeles Times.
    • XOM, still at odds with California air quality regulators over a short-term fix for the company's damaged refinery, appears poised to build a new pollution control system that meets anti-pollution specifications.
    • Since an explosion damaged the refinery last February, XOM has been proposing to use an old pollution control device, one that does not meet state air quality standards, to get the plant operating while it worked on a permanent repair.
    • A short-term fix could have helped lower gasoline prices in southern California to a level more in line with the lower cost in the rest of the U.S.; pump prices in the L.A. area average $3.19/gal vs. the nationwide average $2.28.
    | Wed, Sep. 23, 10:42 AM | 13 Comments
  • Fri, Sep. 18, 11:35 AM
    • Exxon Mobil (XOM -1.9%) is actively hunting for shale bargains in west Texas, as executives with its XTO Energy shale drilling unit meet with small, closely held producers in the Permian Basin to negotiate possible purchases and joint ventures, Bloomberg reports.
    • XOM is expanding its use of a new strategy first deployed in the region last year that offers operators a cut of future proceeds rather than big upfront stock or cash payouts, according to the report.
    • XOM has bought drilling rights or funded partnerships in five Permian Basin transactions during the past 20 months, and now controls drilling rights to 1.5M acres in the Permian region, more than twice the size of its holdings in Iraq or the U.K. sector of the North Sea.
    • The oil downturn brings plenty of bargains from distressed operators, faced with the choice of shutting down rigs and wait it out or surrender some independence to a deep-pocketed savior in exchange for a shot at a future windfall.
    | Fri, Sep. 18, 11:35 AM | 12 Comments
  • Fri, Sep. 18, 9:47 AM
    • BP (BP -2.3%) is expected to continue as operator of the ACG oil field complex after the current production-sharing deal expires, according to Azerbaijan state oil company Socar.
    • The comments signal a thawing in BP’s relations with the Azeri government, after the president three years ago blamed an unexpected decline in oil output from the ACG fields on “grave mistakes” by BP.
    • BP gets ~5% of its oil output from Azerbaijan; others in the ACG development group include Chevron (CVX -2.6%), Exxon (XOM -2.7%) and Statoil (STO -2.4%).
    | Fri, Sep. 18, 9:47 AM | Comment!
  • Thu, Sep. 17, 5:55 PM
    • Exxon Mobil (NYSE:XOM) faces more delays in ramping up production at its Torrance, Calif., refinery following an acid leak and ongoing issues in negotiations with state regulators.
    • In deciding to delay the refinery ramp for the third time with no new date set yet, the South Coast Air Quality Management District said today's scheduled hearing was postponed until XOM “can agree to terms and conditions ensuring that sufficient safeguards are in place to protect the public’s health.”
    • Also, two California Democrats in the U.S. House have written to the U.S. Chemical Safety Board asking for a Sept. 6 acid leak at the refinery to be included in the broader investigation of XOM’s operations.
    • Meanwhile, California continues to suffer the highest gasoline prices in the U.S. behind Alaska, partly because of supply shortage due to the Torrance refinery outage.
    • Earlier: Exxon poised to raise output at Torrance refinery (Sept. 11)
    | Thu, Sep. 17, 5:55 PM | 13 Comments
  • Thu, Sep. 17, 3:18 PM
    • J.P. Morgan analysts met with Exxon Mobil’s (XOM +0.7%) VP of investors relations and liked what they heard, but not enough to change their Neutral rating even as the stock could represent an attractive opportunity for energy investors with a longer-term view.
    • XOM expects to be one of the few companies that can counter-cyclically invest to improve through-the-cycle returns, but the firm remains cautious around supply resilience, suggesting the current cycle could take some time - say, more akin to the1980s rather than 2008-09.
    • JPM sees 2016 as a telling year for the industry, with many hedge programs rolling off for E&Ps, testing the financial capacity of many in the industry and opening the door for a round of strategic M&A, in which it would expect XOM to be active but patient.
    | Thu, Sep. 17, 3:18 PM | 4 Comments
  • Thu, Sep. 17, 10:40 AM
    • SNC-Lavalin (OTCPK:SNCAF) says its Kentz group has been awarded a contract by Exxon Mobil (NYSE:XOM) to design and build an new oil processing facility in Iraq.
    • The size of the contract is not disclosed, but Dundee Capital analysts estimate it could be worth ~$500M to SNC, which would represent 11.4% of SNC’s $4.4B oil and gas backlog at the end of Q2.
    • The firm says the contract underlines SNC’s ability to source oil and gas work globally, something it believes investors do not fully appreciate.
    | Thu, Sep. 17, 10:40 AM | 4 Comments
  • Wed, Sep. 16, 12:59 PM
    • Integrated oil companies will see a huge collective negative cash flow position this year and next, with capex set to be cut further as oil prices struggle to a minimal increase in 2016, according to a Moody's forecast.
    • Despite cost cuts, Moody’s still expects the industry to face a 20% contraction in 2015 free cash flows to a negative position of nearly $80B in 2015, as the ratings agency’s outlook for the global integrated oil and gas industry remains negative into next year.
    • Moody’s expects the industry’s total debt load will increase, with cash balances declining as companies sell assets to cover dividends and capital spending, although most companies have resisted dividend cuts so far.
    • Relevant tickers: XOM, CVX, BP, RDS.A, RDS.B, TOT, STO
    | Wed, Sep. 16, 12:59 PM | 25 Comments
XOM vs. ETF Alternatives
Company Description
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.