ExxonMobil (XOM) Banned From Trucking California Offshore Oil
ExxonMobil Corporation XOM faced a legal setback in its attempt to transport millions of gallons of crude oil through central California.
Transportation was crucial to its plan to reopen offshore oil wells, which had been closed since 2015 after a pipeline leak caused the worst coastal spill in 25 years. Three offshore platforms, known as ExxonMobil’s Santa Ynez Unit (SYU), had been shut down.
A U.S. District Judge has rejected ExxonMobil's appeal to reverse the Santa Barbara County Board of Supervisors’ 3-2 decision to reject the company’s trucking plan in 2022. The judge clarified that while XOM retains the right to operate its offshore oil platforms, it does not have the right to transport the crude via trucks.
The firm argued that it needs to use numerous tanker trucks daily to transport oil through Santa Barbara County until a replacement for the pipeline, which ruptured near Santa Barbara in 2015, is completed. The company claims that truck transport is essential for the revival of three offshore oil platforms and an onshore oil processing facility that has remained closed since the spill.
ExxonMobil proposed to dispatch as many as 24,820 tanker trucks per year along coastal Highway 101 and State Route 166 for up to seven years. The company argued that this was the only viable option for transporting oil from offshore wells to onshore processing facilities until a pipeline became accessible.
However, county supervisors voted against issuing a permit amid concerns over the effect on local traffic and the potential for spills and accidents. Environmental groups believe ExxonMobil’s plan to restart its offshore platforms and truck millions of gallons per week through Santa Barbara County is reckless, dangerous and unwelcome by this community.
Meanwhile, a separate proposal to replace the pipeline remains under review by regulators.
Price Performance
Shares of ExxonMobil have outperformed the industry in the past three months. The stock has gained 12.7% compared with the industry’s 10.4% growth.
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Zacks Rank & Key Picks
ExxonMobil currently carries a Zack Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Range Resources has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for RRC’s 2023 and 2024 earnings per share is pegged at $2.10 and $2.94, respectively.
Pioneer Natural Resources Company PXD is an explorer and producer of oil, natural gas and natural gas liquid. The upstream energy player’s debt to capitalization has been persistently lower than the industry over the past few years, reflecting considerably lower debt exposure.
Pioneer has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for PXD’s 2023 and 2024 earnings per share is pinned at $20.60 and $24.20, respectively.
SM Energy Company SM is an independent oil and gas company that explores, exploits, develops, acquires and produces oil and gas in North America. SM's strong cash generation places it in a better financial position, allowing for investments in dividends, debt reduction and future growth.
SM Energy has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for SM’s 2023 and 2024 earnings per share is pegged at $5.66 and $6.81, respectively.
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