- Global oil majors including Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), Total (NYSE:TOT) and Royal Dutch Shell (RDS.A, RDS.B) can survive in a $40-$50/bbl oil price range but they really need oil above $60 to thrive, according to analysts at BMO Capital.
- The analysts say that at $40 oil, the group's operating cash flows fail to cover current capex and dividend expectations, even with the aid of scrip, whereas at greater than $50/bbl, the majors should on aggregate be able to match full cash outflows
- BMO sees only XOM able to cover its full cash dividend at ~$50/bbl in 2017, although the others should be able to organically cover their dividends at $50-$55 with the aid of financial levers such as scrip dividends, project deferrals (for re-engineering), further cost reductions and efficiency gains.