|Bid||2.450 x 0|
|Ask||2.460 x 0|
|Day's Range||2.430 - 2.490|
|52 Week Range||2.160 - 4.230|
|Beta (5Y Monthly)||0.87|
|PE Ratio (TTM)||8.77|
|Forward Dividend & Yield||0.14 (5.82%)|
|Ex-Dividend Date||Sep 29, 2020|
|1y Target Est||7.37|
After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as […]
(Bloomberg Opinion) -- Et tu, Exxon?Through all the shifts that have swept through the oil market in recent years, one thing has been a reliable constant: Exxon Mobil Corp. has remained resolute in its bullishness about the future of crude. In stark contrast to European competitors who've speculated about a peak in oil demand and switched investments toward renewables, Chairman Darren Woods has kept on preaching that old-time religion.The pullback by rivals shouldn’t be seen as a harbinger of doom for crude, but as an opportunity to spend more aggressively, Woods said at an investor day in March: “The best time to invest in these businesses is during a low, which will lead to greater value capture in the coming upswing.” Internal documents reviewed by Bloomberg Green earlier this year showed the company planned to increase its annual emissions 17% by 2025. Now even this most reliable of oil bulls seems to be having doubts. Exxon Mobil’s natural gas fields will be written down by as much as $20 billion, the company said Monday. More tellingly, those counter-cyclical spending plans are being marked to market. Annual capital investment through 2025 will be in the range of $20 billion to $25 billion, some $10 billion below the level that Woods forecast in March.That still sounds like a pretty substantial number — but when considered in the context of the wells Exxon Mobil is already operating, it looks markedly smaller. Depreciation, depletion and amortization is already running in the region of $20 billion every year. Subtract that amount, and you’re left with a growth capex figure of $5 billion a year at best, or zero at worst.Exxon Mobil likes to point to forecasts that the world will need new oil supplies to increase by 8% a year in the near term to meet rising demand as existing fields decline, with new gas requirements rising 6% a year, too. Its newly modest spending plans aren’t going to be sufficient to meet that scenario, let alone increase its own market share.In capitulating to a more subdued outlook, Exxon Mobil is simply following where other companies have led. It’s the only one of the big seven independent oil majors where analysts’ expectations of depreciation don’t already outstrip capital spending over the three years through 2022.Even if you look at the three years through 2023 to exclude the extreme circumstances of the current pandemic-hit year, BP Plc, Royal Dutch Shell Plc and ConocoPhillips aren’t expected to spend enough to keep up with depreciation. Across the seven large independent oil companies, the deficit will amount to $4.82 billion. Investments in renewables by the likes of Equinor ASA and Shell are still too small to take a substantial chunk out of the industry’s petroleum-focused capex, but they certainly don’t help. Oil giants are divesting from petroleum as fast as any climate-focused fund manager.The same logic applies when you extend things further, to the listed national oil companies. Thanks to a $19 billion cut in capital spending by China’s big three oil majors this year and rising charges resulting from their spending splurge in previous periods, PetroChina Co. and China Petroleum & Chemical Corp., or Sinopec, will be markedly more restrained in their investments in the years ahead. Growth capex totals of $3.18 billion and negative $4.76 billion respectively will be invested in the three years through 2022, based on analyst estimates.Petroleo Brasileiro SA, still recovering from a splurge in the early part of this decade, will reduce its net investments by $6.8 billion over the period. Equinor, aiming at a target of net zero emissions by 2050, will see depreciation exceed capex by about $656 million.Put together, the result looks like an oil industry that stopped spending four years ago and is showing no appetite to start again. Aggregate growth capex across a group of seven large independent and six national oil companies with adequate data will be a negative $23.8 billion this year and minus $6.77 billion next year. Even in 2022, when the sector as a whole should return to a measure of growth, the total will be about $8.8 billion — less than half the amount spent by Exxon Mobil alone in 2014.Oil gets used up quickly, so if the industry doesn’t spend, production will slump in short order. If investment continues at 2020 levels, supply will be 9 million barrels lower than forecast as soon as 2025, according to the International Energy Agency — equivalent to roughly 10% of the current oil market.It’s still probably too early to read oil majors’ miserliness as an indication that they expect demand to fall at quite that pace. The risks of under-investment are relatively limited, as long as everyone moves at the same time. If the world ends up seriously short of crude five years from now, they’ll end up raking in profits that can be recycled on belatedly plugging the deficit.Still, borrowing costs for investment-grade energy companies right now are the lowest they’ve been in six years. If oil majors were half as confident about the future of their core product as they claim to be, they’d be preparing to spend with abandon. When even Exxon Mobil closes its check book, the industry’s future looks truly doubtful.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- China’s oil giants China National Petroleum Corp. and CNOOC Ltd. are considering acquiring Exxon Mobil Corp.’s remaining stake in an oil field in Iraq, which could fetch at least $500 million, according to people familiar with the matter.A deal would mark Exxon’s exit from the project and a further retreat from Iraq by international oil majors, following Royal Dutch Shell Plc’s departure from the giant Majnoon field three years ago. Tough contractual terms, payment delays and political instability have dulled the appeal of what had once been the Middle East’s glittering oil prize.“Iraq has not proved as attractive as it was hoped to be a decade ago,” said Richard Bronze, co-founder of consultant Energy Aspects Ltd. “U.S and European firms are not pursuing those big upstream opportunities -- which is bad news for Iraq’s further expansion plans. Chinese firms are, by contrast, still interested.”CNPC an CNOOC, both state-owned, are weighing a potential deal to buy Exxon’s 32.7% stake in Iraq’s West Qurna 1 field, the people said, asking not to be identified as the matter is private.No final decisions have been made and there is no guarantee the deliberations will lead to a deal, the people said. Geopolitical risks in Iraq could bring uncertainties to any potential agreement, they added. Representatives for CNOOC, Exxon and CNPC declined to comment.Exxon’s departure from the field, where it was once the dominant player and remains the lead contractor, would throw into further doubt a major water-injection project seen as critical for growing Iraq’s production capacity. The U.S. company has been in talks over the common seawater supply project for southern oil fields, which has encountered multiple delays.While the government in Baghdad made enormous progress in rebuilding its war-scarred oil industry in the last decade -- effectively doubling output between 2010 and 2015 despite an Islamist insurgency and other challenges -- it has repeatedly been forced to push back its loftiest production goals.The country was pumping about 4.8 million barrels a day last September, just before a new round of supply cuts agreed with fellow members of the Organization of Petroleum Exporting Countries. It aims to reach 7 million barrels a day by 2027, Oil Minister Ihsan Abdul Jabbar said last month.In 2010, Exxon signed an agreement with Iraq’s state-owned South Oil Co. to rehabilitate and redevelop the West Qurna oil field. Three years later, Exxon reduced its holding by selling a stake to PetroChina, CNPC’s listed unit, and to PT Pertamina. Itochu Corp. acquired Shell’s 19.6% stake in the field in 2018.Iraq awarded a contract to develop the West Qurna oilfield to Exxon and Shell in 2009. The oilfield is one of the world’s largest with expected recoverable reserves of over 20 billion barrels, according to Itochu’s website. The site produces slightly below 500,000 barrels a day, one of the people said.Last year, Exxon’s staff left the Iraqi field after the U.S. withdrew non-essential staff from its embassy in Baghdad, citing a threat from neighboring Iran, Reuters reported at the time. The staff returned two weeks later after boosting company’s security.The U.S. plans to accelerate a drawdown of troops in Iraq to 2,500, from about 3,000 currently, Acting Secretary of Defense Christopher Miller announced on Tuesday at the Pentagon. Before he leaves office in January, President Donald Trump is working to deliver on his longtime pledge to exit “endless wars.”(Updates with analyst comment in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.