Exxon will see its portfolio mix shift to liquids pricing as gas volumes decline, and as new oil and LNG projects start production. Cash margins should improve as a result.
While Exxon will struggle to improve returns materially, it should deliver free cash flow growth to support continued dividend increases and share repurchases.
With coordination between upstream and downstream operations, as well as integrated refining and chemical facilities, Exxon actually achieves a high level of integration that creates value as opposed to simply owning the assets like peers. Read more
With rising resource nationalism, Exxon has found it increasingly difficult to increase production and book reserves. As a result, its more reliant on higher cost projects than in the past.
Returns are unlikely to ever reach historical levels without higher commodity prices. Also, an extended period of low oil prices would force Exxon to increase debt to avoid reducing share repurchases and slowing dividend growth.
The expected decline in capital spending may prove only temporary, and Exxon may have to increase spending in several years to maintain production. Read more
Rex Tillerson became chairman and CEO in 2006 and served previously as president. He has spent his career with Exxon, beginning in 1975 as a production engineer. The acquisition of XTO Energy raised concerns that he may be straying from the returns-focused Read more
Exxon is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2013, it produced 2.2 million barrels of oil and 11.9 billion Read more