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Exxon Mobil Corporation (XOM)

  • 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.
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  • 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.
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  • 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.
  • Thu, Feb. 26, 2:58 PM
    • North Dakota's oil producers have cut the number of active rigs in the state to just 121 from 190 a year ago, according to a new list published by the state’s Department of Mineral Resources.
    • The rig count is now below the threshold of “at least 130” the DMR director had identified last month as needed to sustain output at the current level of slightly more than 1.2M bbl/day.
    • Of the 121 active rigs, 115 are drilling in just four counties at the heart of the Bakken - Dunn, McKenzie, Mountrail and Williams.
    • With the number of rigs in even the core areas down by 30% in just over two months, production likely will begin to plateau or fall in the coming months, Reuters' John Kemp writes.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
  • Thu, Feb. 26, 9:41 AM
    • Venezuela is requesting the annulment of a World Bank tribunal award that orders it to pay Exxon Mobil (XOM -0.8%) $1.6B in compensation for nationalizations.
    • The country alleges that "the tribunal exceeded its powers, failed to state reasons on which the ICSID award was based, and departed from a fundamental rule of procedure," XOM said in its 10-K filing.
    • Enforcement delays of arbitration awards grant the Venezuelan government some breathing room as it struggles with falling oil prices, arrears with private companies, debt payments, and an upcoming election campaign.
  • Tue, Feb. 24, 6:57 PM
    • Refinery profit margins on the U.S. west coast have spiked over the past week, as a refinery explosion and a spreading strike by refinery workers has taken almost 25% of the region's gasoline-making capacity offline, Platts reports.
    • Cracking margin netbacks for west coast refiners reached $31.75/bbl on Monday, up from $18.96/bbl prior to last Wednesday's explosion at Exxon Mobil's (NYSE:XOM) 149.5K bbl/day refinery in Torrance.
    • Meanwhile, the strike by U.S. refinery workers that began Feb. 1 also weighs on west coast operations, with Tesoro's (NYSE:TSO) 166K bbl/day Golden Eagle refinery in Martinez, Calif., idled.
    • The three west coast refineries hit by the strike all are owned by TSO; the other two are the 251K bbl/day Carson, Calif., refinery and the 120K bbl/day plant in Anacortes, Wash.
  • Mon, Feb. 23, 10:22 AM
    • Exxon Mobil (XOM -0.8%) says it replaced 104% of its 2014 production by adding proven reserves totaling 1.5B oil equivalent barrels, of which 1.2B barrels consisted of petroleum and other liquids and 300M barrels of natural gas.
    • Liquid additions during 2014 totaled more than 1.2B bbl, or 162% of production, and natural gas additions totaled ~300M boe for a 42% replacement ratio.
    • At year-end 2014, proved reserves of 25.3B boe comprised of 54% liquids and 46% natural gas.
    • XOM says it added more than 580M boe from U.S. oil-rich shales including the fast-growing Woodford, Permian, and Bakken; ~700M boe came from Canada.
  • Fri, Feb. 20, 2:50 AM
    • The biggest refinery strike since 1980 continues after the United Steelworkers union instructed members to reject a seventh labor contract offered by Royal Dutch Shell (RDS.A, RDS.B).
    • The proposal, the first one made by Shell since Feb. 5 on behalf of companies including Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), "fails to improve safety" in an enforceable way, the USW declared.
    • Since Feb. 1 more than 5,000 USW workers have walked out of nine U.S. refineries that account for 13% of U.S. fuel capacity.
  • Wed, Feb. 18, 7:45 PM
    • Warren Buffett's decision to dump his entire $4B stake in Exxon Mobil (NYSE:XOM) is pointing investors toward more nimble producers such as Suncor (NYSE:SU) and Phillips 66 (NYSE:PSX) that can deliver higher returns during an oil price recovery.
    • J.P. Morgan is reiterating its lukewarm outlook on XOM, "which has not yet fully pulled the trigger to just run at maintenance type levels," as well as ConocoPhillips (NYSE:COP), Chevron (NYSE:CVX) and Cenovus Energy (NYSE:CVE), which the firm says are "getting quite close to their sustaining capex/free cash flow potential already."
    • Not everyone is so down on the supermajors; BlackRock favors the group because of their strong balance sheets, high dividends and integrated business models, and Ed Yardeni notes that the stocks remain attractive for income-oriented accounts.
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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.