ExxonMobil Updates Growth Plans, Significant Additional Upside Possible

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ExxonMobil on Wednesday said it has updated its growth plans and expects annual earnings potential to increase by more than 140 percent by 2025 from 2017 adjusted earnings, assuming an oil price of $60 per barrel and based on 2017 margins.

“Given the success we experienced last year and the progress we’re making on our plans, we have even greater confidence in our ability to grow value for our shareholders,” Darren W. Woods, chairman and chief executive officer, said at the company’s annual investor day at the New York Stock Exchange.

Plans have upside potential in key growth areas, including Guyana and Permian

“We are exceeding the pace of our expected progress on the aggressive growth strategy we laid out last year,” Woods said. “We continue to enhance our industry-leading portfolio, and are leveraging our competitive advantages in integration, scale, technology and execution to deliver long-term value for our shareholders.”

ExxonMobil’s updated earnings projection compares with last year’s estimated increase of 135 percent between 2017 and 2025, based on 2017 adjusted earnings. Cumulative earnings potential from 2019 through 2025 has increased by about $9 billion, supported by further improvements to the company’s investment portfolio and divestment plans.

On track to significantly increase cash flow from operations and asset sales

ExxonMobil expects annual cash flow from operations to reach $60 billion in 2025, assuming oil prices at $60 per barrel and 2017 margins. Cumulative cash flow from operations and asset sales over the period from 2019 to 2025 is $24 billion higher than what was communicated at last year’s analyst meeting, including $15 billion from anticipated asset sales from 2019 to 2021.

The company expects to double return on capital employed by 2025 under the $60 per barrel price scenario described during last year’s investor day.

Return on capital employed expected to double by 2025

In the upstream, growth will benefit from ExxonMobil’s exploration success and progress in development plans. In 2018, the company added 1.3 billion oil-equivalent barrels to its resource base, which included additions from new discoveries and strategic acquisitions, mainly in Guyana and Brazil.

In Guyana, the estimated gross recoverable resource from the Stabroek Block is approximately 5.5 billion oil-equivalent barrels. That compares with the updated resource estimate late last year of more than 5 billion oil-equivalent barrels.

Additional Investor Day Highlights

  • In Brazil, ExxonMobil has built a position of 2.3 million acres, adding 800,000 acres in 2018.
  • A key liquefied natural gas (LNG) project in Mozambique is on track for final investment decision this year. The Papua New Guinea LNG project is progressing. In February 2019 the company sanctioned the Golden Pass LNG project to capitalize on the low cost supply of U.S. natural gas and the expected growth in global LNG demand.
  • In the Permian, the size of the company’s net resource is 10 billion oil-equivalent barrels and is expected to grow further. ExxonMobil’s production in the Permian is expected to exceed 1 million oil-equivalent barrels per day by 2024, an increase of nearly 80 percent from last year’s investor day presentation. The anticipated increase in production will be supported by further evaluation of the Delaware Basin’s increased resource size, infrastructure development plans, and secured capacity to transport oil and gas to ExxonMobil’s Gulf Coast refineries and petrochemical operations.
  • In the downstream, the company is progressing six major refining investments to meet growing demand for higher-value fuel and lubricant products. Three of those – a Beaumont hydrofiner, a delayed coker at Antwerp and an advanced hydrocracker at Rotterdam – are operating. The remaining three – Fawley hydrofiner in the U.K., light crude refining expansion at Beaumont and a residual upgrader in Singapore – are on schedule.
  • In the chemical business, the company detailed plans for 13 new facilities to supply growing demand for products. Seven of the projects started up through 2018 and the remaining six are on schedule. These investments are expected to deliver 30 percent sales growth by 2025, largely driven by technology-enabled performance products.