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ExxonMobil: Going Drilling On Wall Street?

Apr. 10, 2018 2:50 PM ETExxon Mobil Corporation (XOM)FANG, PXD59 Comments


  • Oil company stocks have been beaten down by a combination of market factors recently.
  • One reason is that reserves have not been replaced over the past few years.
  • In this article, we look at how XOM may respond.
  • Current pricing represents an excellent entry point for this 4.12% dividend yield payer.
  • This was shared previously with the members of The Daily Drilling Report Market Place community.


Exxon Mobil (NYSE:XOM) traces its roots to the Standard Oil Trust which dominated the petroleum industry in the late 19th and early 20th centuries. Its dominance in that era was so profound that ultimately it was broken up into seven separate companies, some of whom became known as the "Seven Sisters," so named for their mid-twentieth century dominance.


There has probably not been such a fabulous accumulation of wealth until the advent of the Internet companies. Some of which now face the same reactionary tide that Standard Oil faced a hundred years ago. The perception is they are just too powerful. Time will tell if the Internet titans ultimately meet Standard's fate. One thing only is certain, as with Standard, the owners will get richer still, as did John D. Rockefeller, the majority owner of the Standard Oil Trust.

Exxon Mobil, the major surviving company from the original seven, sets the standard for excellence among the Super-Major integrated oils, in every area but one. Reserves replacement. Its stock price has suffered as a result, and is currently about 8% below its 200-day moving average of $80.56/share.


Source, Chart by author

In an earlier article entitled, "The Return Of Deepwater Drilling...", I made the point that XOM needed to improve their performance in this area. Hence, their significant outlay in Brazil's Round 15 Deepwater auction. I don't think it will stop there, as this is long lead time stuff. If they wanted production now, which they do, they should have been drilling the last four or five years. I am not picking on them here, as there are obvious reasons why this hasn't happened. Still, things are what they are, and XOM needs some reserves.

XOM has had some hard knocks in the last few years. Write downs of

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This article was written by

Fluidsdoc profile picture
40 years of oilfield and analyst experience to work to find you winners.

I am an oilfield veteran of 38+ years. Retired from Schlumberger since 2015. My background is drilling and completion fluids. I have authored a number of technical papers on completion topics. I have worked around the world- Brazil, Russia, Scotland, and the Far East. I still maintain a training and consulting practice and am always willing to help people who want to learn.

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