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ExxonMobil (XOM) Expects Raised Earnings & Oil Production

Exxon Mobil Corporation XOM has revealed plans for increased earnings and production expansion.

Earnings

ExxonMobil expects a substantial rise in its earnings potential through 2027, with upstream earnings projected to more than double from the 2019 reported level. The outlook is underpinned by robust production growth in the Permian Basin and Guyana.

XOM mentioned that effective implementation of its strategic initiatives since 2019 enhanced its earnings capacity, contributing about $10 billion to its annual earnings and cash flow at a real Brent price of $60 per barrel. The company is progressing toward achieving an additional $14 billion in earnings and cash flow growth potential over the next four years.

Capital Spending

ExxonMobil expects an annual total of $23-$25 billion in capital expenditure and exploration expenses. The company aims to allocate $22-$27 billion annually to project spending through 2027. Additionally, there are plans to increase spending on emerging lithium and low-carbon ventures by 18% over this period.

The expenditure forecast involves a heightened commitment to its energy transition division, known as Low Carbon Solutions. The budget for Low Carbon Solutions is set to increase from $17 billion to $20 billion from 2022 to 2027. However, it is important to note that this increased spending will be contingent on government support.

Share Buyback

ExxonMobil plans to raise its annual share buybacks to $20 billion through 2025, up from the current $17.5 billion, following the completion of the Pioneer merger. The company will also persist in its ongoing divestment strategy for its refining operations.

Production

The company predicts a production increase to 3.8 million barrels of oil equivalent per day (Boe/d) in 2024, up from this year’s 3.7 million Boe/d, as it places its confidence in growth from the Permian shale basin and Guyana.

XOM indicated that it anticipates maintaining a flat production until the end of this year, standing at 3.7 million Boe/d primarily due to its withdrawal from Russia.

Emission Targets

ExxonMobil has reported progress in its efforts to achieve a 40-50% reduction in upstream-operated greenhouse gas emissions intensity by 2030 from the 2016 reported level. The company has already accomplished half of this reduction target.

Additionally, ExxonMobil is pursuing more than $20 billion worth of lower-emission opportunities until 2027. These opportunities encompass various areas, such as lithium, hydrogen, biofuels, and carbon capture and storage.

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EOG Resources EOG boasts an appealing growth profile, delivers upper-quartile returns and is guided by a disciplined management team.

EOG Resources has a strong focus on returning capital to shareholders. From 1999 through 2024, the company is committed to raising its regular dividend at a compound annual growth rate of 21%. EOG has never suspended or lowered its dividend, even during business turmoil, reflecting solid underlying business.

Liberty Energy LBRT offers hydraulic fracturing services to onshore upstream energy companies across multiple basins in North America.

Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.

PBF Energy Inc. PBF has one of the most complex refining systems in the United States, boasting a high Nelson Complexity Index of 12.7.

Compared with composite stocks belonging to the industry, the company’s debt-to-capitalization ratio has been consistently lower over the past few years. PBF boasts a robust liquidity position, with a cash balance of $1.9 billion, which is more than sufficient to cover its long-term debt of $1.2 billion.

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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

PBF Energy Inc. (PBF) : Free Stock Analysis Report

Liberty Energy Inc. (LBRT) : Free Stock Analysis Report

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