| View previous topic :: View next topic |
| Author |
Exxon Mobil |
Prospero
Senior Poster
Joined: 01 Mar 2006
Posts: 82
|
 Posted: Thu Oct 05, 2006 2:57 pm Post subject: Exxon Mobil |
 |
|
I like Exxon Mobil here. I bought some earlier today. Technically, it seems to have broken through long term resistance at $65. Considering the last month's collapse in energy markets, the price is reacting very well, having pulled back to support. If energy prices rebound from here, and the Dow continues its ascent, there could be a double whammy of good news for the stock. If not, the downside risk seems to be limited.
I also quite like Conoco Phillips. The technical picture isn't so rosy, but it could be aided by the same factors (rising Dow/Energy) and at a P.E of 5.5 or so it looks very cheap.
http://stockcharts.com/gallery/?XOM
http://stockcharts.com/gallery/?COP
Any thoughts?
 |
|
| Back to top |
|
 |
| Author |
Exxon Mobil Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Fri Apr 27, 2012 11:29 pm Post subject: |
|
|
Morningstar on XOM's 1Q earnings.
| Quote: | | ExxonMobil XOM reported first-quarter earnings of $9.45 billion, an 11% decline from the year before as lower production volumes, higher expenses and the absence of asset sale gains in the upstream segment offset the benefit of higher oil prices and higher downstream earnings. Upstream earnings fell to $7.8 billion in the first quarter from $8.7 billion a year earlier. Total production fell about 5.5% from the year before as liquids and natural gas volumes fell 7.7% and 3.4%, respectively. Entitlement effects, due to higher prices, and divestments were largely responsible for the volume declines. Absent these effects, production volumes fell about 1%. On a positive note though, ExxonMobil announced recent exploration success. In the Black Sea, an affiliate drilled a successful deepwater new play test on the Neptun Block while in Tanzania the company participated in a successful exploration well that discovered approximately 5 trillion cubic feet of recoverable gas. Downstream first-quarter earnings rose to $1.6 billion from $1.1 billion a year earlier thanks to asset sales and positive mix effects outweighed lower margins. Chemical earnings fell sharply to $701 million from $1.5 billion a year earlier, largely a result of weaker margins. Share repurchases during the quarter totaled $5 billion and the company expects to repurchase the same amount during the second quarter. Also, yesterday, ExxonMobil announced a second quarter dividend of $0.57 per share, a 21% increase. The increase in shareholder distributions speaks to ExxonMobil's strong cash flow generation, $21.8 billion during the quarter compared with $18.2 billion last year. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Tue Jan 31, 2012 2:18 pm Post subject: |
|
|
Morningstar on XOM's 4Q earnings.
| Quote: | | ExxonMobil XOM reported a slight increase in fourth-quarter earnings as the benefit of higher price realizations was largely outweighed by the drop in production volumes and contraction in refining and chemical margins. The sharp drop in production, albeit including the effects of divestments and OPEC curtailments, will probably focus investor attention on the challenges Exxon is facing in driving production growth. While we certainly think the environment is becoming more challenging for the company, we hesitate to draw too many conclusions from one quarter. With a queue of projects slated for startup over the next few years , we expect Exxon can reverse some of the production declines. However, given that investment levels continue to rise as production wanes, execution and on-time delivery will be critical to demonstrate the value of past investment. Also, growth will need to emerge from areas other than U.S. natural gas, where low prices are probably weighing on returns. Upstream earnings increased to $8.8 billion from $7.5 billion the year before, also reflecting the benefit on asset sales gains. Production volumes slipped significantly during the quarter, falling almost 9% from the same period a year ago. Liquids production fell about 11% as a result of OPEC quota effects, divestments, and natural field decline. Natural gas dropped 7% partially as a result of field decline and lower demand in Europe. However, U.S. natural gas production growth continued with volumes rising 3.5%. For the full year, Exxon increased production a little over 1%, with liquids volumes falling almost 5% and natura l gas volumes increasing over 8%, primarily in the United States. Downstream earnings registered similar declines to those of Exxon's integrated peers. For the fourth quarter, downstream segment earnings were $425 million, compared with $1.2 billion in the same period last year and $1.6 billion in the third quarter of 2011. The margin weakness during the quarter extended to the chemicals segment as well, where fourth-quarter earnings of $543 million were well below the $1.1 billion earned last year. Both segments probably saw their low points during the fourth quarter, and we would expect earnings to bounce back in the first part of 2012, though likely not to the levels of the second and third quarters of 2011. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
|
| Posted: Fri Oct 28, 2011 6:53 am Post subject: |
|
|
Let's say it again, Ten-billion dollars.....and again.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Fri Oct 28, 2011 12:10 am Post subject: |
|
|
Morningstar on XOM's 3Q earnings:
| Quote: | | ExxonMobil XOM reported a 41% rise in third-quarter earnings from the same period a year ago, thanks largely to higher price realizations and strong downstream results. Upstream earnings rose 53.5% to $8.4 billion from $5.5 billion a year earlier, as higher oil prices more than offset the effects of lower production volumes. In the first quarter without favorable comparables thanks to the XTO acquisition, production slipped 3.8%. Liquids production was down 7.1%. Excluding impacts of entitlement volumes, OPEC quota effects, and divestments, liquids production was down 1%. Increased volumes from Iraq, Qatar, and Russia partial ly offset field decline. Natural gas production growth was flat year over year, with growth only in Europe and North America. However, North American natural gas production only grew 5.1%, suggesting that ExxonMobil may be slowing drilling in the face of low prices. We look forward to management comments on Thursday's conference call for further insight. On a positive note, profitability remained strong, with net income per barrel rising slightly to $21.48 from $21.29 in the second quarter despite the sequential drop in production and lower oil prices. Downstream segment earnings continued to show strength, increasing 36.1% to $1.6 billion from $1.2 billion a year earlier. Increased refining margins offset unfavorable foreign exchange impacts and lower gains on assets sales in the prior period. Unsurprisingly, given the margin strength during the quarter, the U.S. downstream segment was responsible for the earnings improvement. Domestic downstream earnings rose $646 million while non-U.S. downstream earnings fell $227 million. However, earnings for both segments rose from the second quarter as a result of continued global margin strength. Chemical earnings proved to be a weakness this quarter, as earnings fell 18.4% to $1.0 billion from $1.2 billion a year earlier. A 5% decline in prime product volumes and unfavorable tax effects offset margin improvement. Overall, the quarter held few surprises. However, production volumes and chemical earnings are tracking below our full-year estimates, while downstream earnings will probably finish the year stronger than we anticipated. We plan to make some slight adjustments to our production outlook for the year, but expect our fair value estimate to remain unchanged. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Wed Aug 31, 2011 1:21 pm Post subject: |
|
|
Morningstar on XOM's latest joint venture with Rosneft:
| Quote: | | ExxonMobil XOM announced Tuesday that it has entered an agreement with Russian oil company Rosneft to jointly explore and develop oil and gas resources in Russia, the United States, and other countries not specified. While the announcement created a lot of headlines, it was short on details. Not knowing the precise financial terms, it is difficult to judge the deal. However, at the very least, the agreement provides ExxonMobil access to Russia and a potential path to future oil volume growth while denying other majors such as Royal Dutch Shell RDS.A the same opportunity. The deal also validates our long-held thesis that ExxonMobil is a preferred partner for national oil companies. Given its expertise, technology and project management ability, ExxonMobil presents a compelling option for Rosneft. Also, unlike BP BP, ExxonMobil was not using the deal to bolster investor confidence, which probably strengthened its negotiating position. ExxonMobil's relationship with Rosneft as a result of its participation in the Sakhalin project in eastern Russia likely made it a more natural partner as well. The only monetary terms specified were the joint $3.2 billion of planned investment in the Kara and Black seas, though the timing of the investment was not disclosed. Rosneft will hold a 66.7% interest and ExxonMobil a 33.3% interest in both those ventures. The deal appears to rest more on an exchange of assets as opposed to the proposed BP-Rosneft deal from earlier this year, which included essentially the same assets in Russia and entailed a direct interest in each company. Rosneft will have an opportunity to gain equity interest in ExxonMobil's deep-water projects in the Gulf of Mexico and tight oil fields in Texas. Meanwhile, the companies will jointly study developing tight oil resources in western Siberia and create a research center for future exploration of Arctic projects in offshore Russia. We think this structure could mitigate some of the risk, including political, for ExxonMobil as opposed to a share swap or direct investment in Rosneft. We assume ExxonMobil would have to see certain development or exploratory milestones met before Rosneft could gain any interest in its U.S. assets. However, ultimately the value of the assets swapped between the two firms will determine how good of a deal this is for ExxonMobil. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Thu Jul 28, 2011 2:01 pm Post subject: |
|
|
Morningstar on XOM's 2Q earnings ($10.7 billion):
| Quote: | | ExxonMobil XOM reported a 41% rise in second-quarter earnings from the same period a year ago, thanks largely to higher oil and natural gas prices and improved downstream results. Upstream earnings registered the largest gain, with earnings rising 60% to $8.5 billion during the quarter from $5.3 billion a year earlier. In addition to higher oil and natural gas realizations, particularly for international volumes, overall production increased 10% year over year. The bulk of the gains came from increased natural gas production due to the addition of XTO volumes compared with the previous year and the startup of the Qatari LNG p rojects. Natural gas volumes rose 22% from the second quarter last year, while oil volumes registered only a 1% gain due in part to the effect of higher prices on entitlement volumes and OPEC curtailments. We would expect these impressive year-over-year growth numbers to moderate in the second half of the year as comparables become more difficult because of the closing of the XTO transaction last June. Still, based on current guidance, ExxonMobil still maintains the greatest near-term growth profile of the major integrateds. Downstream earnings also rose, but the gains were limited to the U.S. segment. Overall downstream second-quarter earnings increased 11% to $1.4 billion from $1.2 billion the year before. However the 67% increase in the U.S. segment was offset by a decline of 20% in the international segment. We witnessed similar international weakness in ConocoPhillips' COP earnings earlier this week, which could portend continued declines. Given ExxonMobil's large international refining footprint, it would be adversely affected. The chemical segment registered declines as lower volumes and unfavorable tax effects offset the benefit of higher margins. Earnings for the segment slipped 3% from the second quarter last year. Unlike the downstream segment, the international segment posted year-over-year earnings gains, while U.S. earnings fell. However, international earnings were well off first-quarter levels, and both segments saw volumes fall. ExxonMobil repurchased $5 billion worth of its own shares during the quarter and expects to repurchase the same amount in the third quarter. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Fri Apr 29, 2011 1:20 am Post subject: |
|
|
Morningstar on XOM's 1Q earnings ($10.65 billion):
| Quote: | | ExxonMobil XOM reported a 69% rise in first-quarter earnings from the same period a year ago, thanks largely to higher oil and natural gas realizations. However, the earnings improvement was not confined to the upstream segment, as the downstream and chemical segments both reported robust earnings improvements from the first quarter last year. While only one quarter, we see the strength in each segment as supporting evidence of the value in ExxonMobil's integrated model. Highlighting the strength of the refining market, downstream earnings increased to $1.1 billion in the first quarter compared with $37 million last year. The bulk of the improvement came in the United States, where ExxonMobil reported downstream earnings of $694 million compared with a loss of $60 million last year on only slightly higher throughput volumes. While the international downstream posted year-over-year gains, profit fell significantly from the fourth quarter. We hope to glean additional information as to why--and as to whether this is a market trend or operational issue--on Thursday's conference call. Chemical earnings increased 21% to $1.5 billion from the year before as improved margins helped to offset lower sales volumes and the absence of asset sales, which benefited last year's earnings. Upstream earnings increased 49% to $8.7 billion from the year before, thanks to higher oil price realizations as well as greater production volumes. While U.S. upstream delivered the bulk of the production gains thanks to the addition of XTO volumes, the international upstream segment saw the greatest earnings improvement. Desp ite essentially flat volumes as a result of entitlement volumes and OPEC curtailments, the international segment posted a 57% increase in earnings thanks to greater exposure to oil. Meanwhile, the U.S. upstream segment registered earnings growth of only 17% despite total production growth of 76% as natural gas realizations fell from last year. We expect this dichotomy to continue until U.S. natural gas prices recover. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Mon Jan 31, 2011 10:44 pm Post subject: |
|
|
Morningstar on XOM's 4Q earnings:
http://quicktake.morningstar.com/StockNet/san.aspx?id=368222
| Quote: | | ExxonMobil XOM reported a 53% rise in fourth-quarter earnings from the same period a year ago, thanks to strong results across all operating segments. Upstream earnings increased 29% from the year before, thanks to higher oil and natural gas price realizations as well as greater production volumes. As with the third quarter, the continued ramp-up of ExxonMobil's liquefied natural gas facilities in Qatar and the addition of XTO production volumes were the largest contributors to growth. As a result, natural gas drove growth with an increase in volumes of 37% compared with the same period a year ago. Oil volumes also benefited from the Qatar projects and the XTO acquisition, which offset natural field decline to produce volume growth of almost 6% during the quarter. We expect favorable comparable production growth figures to continue into the first and second quarter of 2011, thanks to inclusion of these volumes. However, volumes gains were not limited to the United States and Qatar. ExxonMobil realized total volume growth of almost 14% from operations in Russia and the Caspian Sea region as well as a rebound in European natural gas volumes. For the full year, ExxonMobil realized production growth of 13% led by gains in natural gas volume of 31%. Production of crude oil and natural gas liquids rose 1.4% year over year. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Thu Oct 28, 2010 3:41 pm Post subject: |
|
|
Morningstar on XOM's 3Q earnings:
| Quote: | | ExxonMobil XOM reported a 55% rise in third-quarter earnings compared with the same period a year ago, thanks to higher crude oil and natural gas price realizations, improved refining margins, and strong chemical results. Earnings also benefited from a 20.6% increase in total production from the year-ago quarter. Production gains came primarily from the continued ramp-up of ExxonMobil's liquefied natural gas facilities in Qatar and the addition of XTO production volumes. As a result, natural gas drove growth with an increase in volumes of 49.5% compared with the same period a year ago. Oil volumes also benefited from the Qatar projects and the XTO acquisition, which offset natural field decline to produce volume growth of 3.7% during the quarter. Through the first nine months of the year, production volume increased 11% from the year-ago period, led by gains in natural gas volume of 28.7%. Benefiting from higher price realizations as well as increased production volume, third-quarter upstream earnings rose 36% from the third quarter of 2009. We expect the company to continue reporting strong production growth results for the rest of the year as benefits from the addition of XTO and higher volumes from Qatar. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Fri Jul 09, 2010 3:38 pm Post subject: |
|
|
Morningstar on the latest update of the XTO Energy acquisition:
| Quote: | | CEO Rex Tillerson offered an update on the acquisition of XTO Energy. The deal, which closed June 25, makes ExxonMobil the largest natural gas producer in the United States. During the conference call, management discussed the immediate financial impact of the acquisition. While the company expects production and cash flow to be accretive, the effect on near-term earnings per share will be dilutive. The company plans to leave XTO's hedges for 2010 and 2011 in place, but in keeping with its previous policy, will not hedge any future production. The acquisition resulted in a roughly 9% increase in outstanding shares and the assumption of $11 billion worth of debt. ExxonMobil plans to repurchase $3 billion worth of shares in the third quar ter, an increase from the previous quarterly rate of $2 billion before completion of the acquisition. When economical, it will look to restructure the assumed debt. Tillerson emphasized that the acquisition does not alter ExxonMobil's entrenched focus on returns. However, he was willing to concede that attractive returns on investment may be a few years away, given the long-term nature of the acquisition. In the current price environment, ExxonMobil will look to optimize its investments by drilling only the most attractive wells and holding on to currently uneconomical resources at the lowest possible costs. With its financial strength and little threat of lease expiration, the company can bide its time and drill opportunistically compared with many smaller exploration and production companies. In the meantime, ExxonMobil will seek to create value through reverse integration of XTO's processes into its lower 48 conventional and unconventional operations. The company believes after years of limited investment in the region, it has room to improve its cost structure and enhance its capabilities by leveraging XTO's expertise. The company plans to export XTO's knowledge to its global portfolio once international activity accelerates. If ExxonMobil can integrate XTO's operating expertise with its disciplined capital-allocation strategy, the acquisition should ultimately prove to be a winner. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
|
| Posted: Thu May 20, 2010 9:39 am Post subject: |
|
|
Some heroes out there:
Daniel Dicker
energy shares
5/20/2010 11:06 AM EDT
Exxon at numbers not seen since crash of late 08 and even 06 -- I don't care, they can kill it more, sure -- but I'm buying XOM under $61 -- take my money, please -- and they probably will, to start
If I spend the rest of my life with only ONE equity trade, it will be buying XOM at $60 and selling it at $90 -- it seems to give it to you over and over -- This one is for the staying players, this is no 'quick hit' trade.......
Good luck
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Mon Feb 01, 2010 11:26 am Post subject: |
|
|
Morningstar's latest notes on XOM:
| Quote: | | ExxonMobil XOM reported a 23% drop in fourth-quarter earnings compared to the same period a year ago, as losses for the downstream segment offset the effects of higher oil prices. Losses in the U.S. downstream segment continued from the third quarter, thanks to lower margins on refined products. For the full year, U.S. downstream operations suffered a loss. Results for the international downstream segment were only slightly better. While the international downstream operations avoided a loss, fourth-quarter earnings fell 96% from the period a year ago and 70% for the full year. Thanks to the relative strength of the interna tional operations, the downstream segment managed to produce earnings for the full year. However, poor results may persist in future quarters. While 2009 may mark the trough for refining margins, we do not believe a quick recovery is likely. Upstream earnings improved slightly for the quarter compared to the same period a year ago as lower natural gas prices and lower gains from asset sales were offset by the benefit of higher oil prices. Total oil equivalent production for the fourth quarter grew 1.6% from the period a year ago. However, excluding the effects of entitlement volumes, OPEC quotas and divestments, production would have increased over 3%. Oil production for the quarter was down over 3% compared to the same period ago, but essentially flat excluding the external factors previously mentioned. Natural gas production fared much better though. Thanks to the ramp-up of projects in Qatar, fourth-quarter natural gas production increased almost 9% from the same period a year earlier. Full-year production numbers did not appear as impressive. Total oil equivalent production volumes for the full year were essentially flat compared to 2008. Oil production for the full year fell slightly less than 1%. Excluding external constraints, full-year oil production would have grown almost 2% with the ramp of projects in Qatar and West Africa. Natural gas production finished the year up 2% from the previous year. While full-year production finished slightly higher than our forecast, it still fell short of the company's goal of 2% average growth per year. However, given the size and long lead time of ExxonMobil's projects and influence of outside factors, we expect production growth to be lumpy. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
|
| Posted: Sun Jan 10, 2010 1:53 pm Post subject: |
|
|
OxyPete: Always took and interest in this global "trading house" headquartered down at the bottom of UCLA campus with it's fine museum attached. Armand Hammer was a dashing figure of the interantional art set and cold-war politics. As an indirect outlet to Soviet Hierarchy he played the connection well when half the world's oil was off limits to the West. Indeed, he may have been the all-time ulitmate Proletarian insider proving "capitalism's" multi-faceted ways.
His death around the time Salomon Bros. folded into grand corporate form definitely marked an end of an era.
And I like the current company. With its insider's game and backyard focus it will no doubt be a big beneficiary of California's budget woes.
Occidental breaks away from the pack
By Sheila McNulty in Houston
| Quote: | California dreaming: oil finds in the state could be 'game changing' for Occidental, say analysts
Stephen Chazen, president of Occidental Petroleum, likes to tell the story of a university professor who in 1968 urged him against entering the oil industry, insisting he would not have a full career before supplies ran out.
As if to illustrate how wrong that professor was, Occidental in July announced the biggest oil find in California in 35 years, a field some analysts estimate could hold 1bn-2bn barrels and mark the start of a new era of exploration in the US.
The California-based oil company would only say it had found 150m-250m gross barrels of oil equivalent reserves in a part of Kern County it would not specify, using techniques it declined to reveal.
Occidental, the fourth biggest US oil company, has made enhanced oil recovery its focus amid estimates that two-thirds of the world's oil remains in the ground. Much of it was once considered inaccessible or uneconomical to extract, and it has long been routine for the majors to stop pumping once the easy oil was out.
"We work the assets harder than the typical major," Mr Chazen says. "Our objective is to acquire oil fields that require work to get more oil out of the ground. It is a philosophically different approach.''
Doing so effectively, with everything from steam to carbon dioxide forced down into wells, has elevated Occidental to fourth-largest oil and gas company in the US, based on market capitalisation.
More than a quarter of Occidental's oil and gas production comes from the Middle East-North Africa region – where the company has been an active investor for more than four decades – leaving it with the sixth-biggest position among global oil and gas groups. It is present in Libya, Oman, Qatar, Bahrain and Yemen.
The group also has a presence in Argentina, Bolivia and Columbia, but it is the California field generating the excitement.
Doug Leggate, analyst at Bank of America Merrill Lynch, says Occidental is poised for a period of growth, lifting oil and gas production almost 45 per cent within five years.
"Longer term, opportunities have emerged that extend the growth outlook further, anchored by the recent discovery in California that we view as a potential game changer for the stock,'' Mr Leggate says.
Fortune Magazine's 2009 survey of the "most admired companies'', ranked Occidental top in mining and crude oil production, and in the world's top 10 in the use of corporate assets, management quality, financial soundness, and long-term investment. It is hard to compare Occidental to peers in the industry because it is several times larger than the typical independent but significantly smaller than a major.
Like a major, it has little exploration risk because it buys known fields that other companies did not have the technology or expertise to tap once the easy oil has been recovered.
It also pays a rising dividend and boasts an "A" credit rating by all major ratings services.
Occidental can also boast very little debt (its debt to capital ratio is 9 per cent, among the lowest in the industry).
Like an independent, it has no refining or marketing business and a focused international scope, representing almost 40 per cent of Occidental's production. It moves quickly to acquire assets. "We write cheques quickly," Mr Chazen says.
Most are for small fields or plots of land from individuals; so small that they do not require disclosure. This allows Occidental to average between 40-45 acquisitions a year, quietly bulking up on assets with good production potential given improving technology. The company is forecasting 5-8 per cent annual production growth to 2012.
"We believe that Occidental's momentum, strong balance sheet and high oil leverage will lead it to outperform peers over the next 12 months,'' says Thomas Driscoll, energy analyst at Barclays Capital.
Ben Dell, senior analyst at Bernstein Research, said in a recent report on exploration and production companies that Occidental breaks away from the pack with consistently lower than average search and development costs.
"Its peer group-leading returns and low debt have made it a darling of investors, who see the company as one of the only safe places in the exploration and production space,'' he says.
The company carefully chooses where to invest: California, Texas, New Mexico and Colorado in the US, which provided 60 per cent of Occidental's production in 2008.
The company is more focused on oil – 75 per cent oil to 25 per cent natural gas – in spite of the rush to develop natural gas projects.
It also has no interest in renewables, which Mr Chazen says have nothing to do with its expertise in oil and gas production.
"Shareholders can take the dividends we pay and buy Chinese solar stocks,'' Mr Chazen says. "There's no real good substitute for oil. Forty years from now, there is still going to be a vibrant oil industry.''
|
http://m.ft.com/cms/s/0/f8cfbc58-f95c-11de-80dc-00144feab49a.html?catid=43&SID=b011ab22aa3f7253d2a52a2c1a0245f5
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16932
Location: Sunny California
|
| Posted: Tue Dec 15, 2009 9:09 am Post subject: |
|
|
This is a big bet not only on fossil fuel, but, radically for an Oil Major, on native soil.
| Quote: | This move is clearly bearish for long-term natural gas prices ExxonMobil’s move
seems to be a clear statement from the most highly regarded technical managers in
global oil that unconventional natgas is a global game changer. XOM argues that they
are paying fair value for XTO, based on major natgas deals (see within); but that is not the focus. Rather, this is an expansionary move into a new mega-theme, and as such there is no near-term synergy or cost cutting. The long-term value will come from bestin- class process and technology applied to the single largest global asset base in the unconventional theme. XTO jump starts XOM’s drive into that. That short-term dilutive, long-term accretive move to be lowest-cost biggest-scale producer is absolutely in line with ExxonMobil’s strategy. However it is also only well suited to the long-term investor; and ultimately it is negative long-term natgas prices. Part risk is that XOM fails to retain the intellectual capital at XTO long enough to benefit from XTO’s “3,000 employees fit for purpose.” |
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11735
Location: Los Angeles, California
|
| Posted: Mon Dec 14, 2009 2:19 pm Post subject: |
|
|
Morningstar's initial analysis on the XTO deal:
| Quote: | | On Monday, ExxonMobil XOM announced an agreement to acquire XTO Energy XTO in a $41 billion all-stock transaction. We view this as a historic deal that marks a dramatic shift on the part of the premier major integrated firm to bet large on U.S. unconventional gas. XTO's broad-based U.S. oil and gas portfolio produces roughly 5% of U.S. natural gas supply. Other major integrated firms, both European and domestic, have shown greater interest in U.S. unconventional gas over the past year; however, these have often involved smaller partnerships. Today, Exxon has brought out its cannons where others have been using small arms. XTO shareholders will receive 0.7098 share of ExxonMobil stock for each share of XTO. Using ExxonMobil's Friday closing price of $72.83, this translates into a $51.70 per share consideration for XTO. Exxon's offer falls just shy of our $53 fair value estimate for XTO, but represents a 25% premium to XTO's closing price Friday. Using our $87 fair value estimate for ExxonMobil shares, this deal represents a $62 per share consideration for XTO. At first blush, this deal looks pretty fair for both ExxonMobil and XTO shareholders. |
|
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
