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ExxonMobil Corporation is a global energy company engaged in the exploration and production of crude oil and natural gas, as well as the manufacture, trade, transport, and sale of petroleum products, petrochemicals, and specialty products . The company is also investing in lower-emission business opportunities, including carbon capture and storage, hydrogen, lower-emission fuels, and lithium . ExxonMobil's diverse portfolio allows it to capture value across the energy value chain, contributing significantly to its total revenue of $334.7 billion in 2023 .
- Upstream - Focuses on the exploration and production of oil and gas, significantly contributing to the company's earnings.
- Energy Products - Involves refining and marketing of fuels, closely tied to industry refining margins influenced by global supply and demand dynamics.
- Specialty Products - Includes high-value products like lubricants, contributing to the company's diverse offerings.
- Chemical Products - Involves the production of petrochemicals, adding to the company's comprehensive product portfolio.
What went well
- Exxon Mobil is achieving more synergies than initially anticipated from the Pioneer acquisition, particularly in the Permian Basin, resulting in increased efficiencies and value generation.
- The company sees significant growth potential in innovative technologies like Proxxima and Carbon Materials Venture, which could contribute multiple billions of dollars in revenue over the next 5 to 10 years.
- Exxon Mobil continues to maximize production capacity and value in key projects like Guyana, with expectations of ongoing strong performance and value creation.
What went wrong
- Exxon Mobil is withdrawing from exploration opportunities like the farm-down process in Namibia, potentially limiting future growth in upstream reserves.
- Uncertainties exist in the commercialization timelines for new ventures such as Proxxima thermoset resin and Carbon Materials Venture, as they require proving success before ramping up production, which may delay potential earnings contributions.
- Entering the challenging Asia chemicals market with the China One project amid bottom-of-cycle conditions and overcapacity, which may impact the project's returns despite being low-cost and high-performance.
Q&A Summary
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Guyana Production Capacity
Q: How do you reconcile production vs capacity in Guyana?
A: Darren Woods explains that there are many variables affecting production versus capacity in Guyana, including the timing of project startups and scheduling of infill drilling to maintain capacity utilization. The focus is on fully utilizing capital and pushing production safely, finding ways to fill capacity. They plan to provide more details in December during the corporate plan review. -
LNG Projects Update
Q: What's the status of the Golden Pass and Qatar LNG projects?
A: Darren Woods states that the Golden Pass project is expected to be delayed by about 6 months, with first LNG anticipated at the end of 2025 or early 2026, due to a contractor bankruptcy. Each train is expected to follow approximately 6 months apart. Regarding Qatar's North Field expansion, they feel good about the collaboration with Qatar Energy but defer detailed updates to them. Overall, they have a strong LNG portfolio with positive market response and strong customer interest. -
Downstream Earnings Beat
Q: Can you discuss the drivers behind the downstream earnings beat?
A: Darren Woods attributes the strong downstream results to a new approach optimizing the full value chain, cost reductions, centralizing activities, and improving maintenance efficiency. Eliminating barriers between chemical and refining businesses and optimizing molecules across both have had a significant impact. Kathryn Mikells adds they saw a $0.5 billion uplift year-to-date from advantaged project growth and cost savings, including the Beaumont expansion and Permian Crude Ventures. A faster-than-expected restart at Joliet also contributed positively.
Guidance Changes
Annual guidance for FY 2024:
- Capital Expenditures (CapEx) and Exploration Expense: $28 billion (raised from $25 billion )
- Golden Pass LNG Project: First LNG expected in the back end of 2025, potentially slipping into the new year (lowered from first LNG anticipated at the back end of 2025 )
- Dividend: $0.99 per share (no prior guidance)
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Given the variables affecting production in Guyana, such as project timing, depletion rates, and infill drilling schedules, how do you plan to optimize production versus capacity to ensure full utilization and maximize returns on your capital investments?
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With the $15 billion cost savings target by 2027 and approximately three-quarters already achieved, can you elaborate on how much of these savings are attributable to AI and technology initiatives, and what specific plans you have to leverage technology further to drive additional efficiencies beyond the initial target?
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After withdrawing from the farm-down process in Namibia, how are you balancing the pursuit of new exploration opportunities with maintaining a robust upstream portfolio, especially when assessing the commercial viability and scalability of new resources in light of your already full upstream hopper?
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Considering your ambitious plans for Proxxima and the Carbon Materials venture, both aiming to generate multiple billions of dollars in revenue within the next 5 to 10 years, what specific milestones and challenges do you anticipate in scaling up production and achieving market acceptance for these new technologies?
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Given the current bottom-of-cycle conditions in the Asia chemical markets, how confident are you that the China One project will meet your projections without a return to mid-cycle margins, and what strategies are you implementing to ensure its competitiveness and profitability in a market with excess supply?
Q3 2024 Earnings Call
- Issued Period: Q3 2024
- Guided Period: FY 2024
- Guidance:
- Capital Expenditures (CapEx) and Exploration Expense: $28 billion, including $25 billion for ExxonMobil and about $3 billion for Pioneer .
- Golden Pass LNG Project: First LNG expected in the back end of 2025, potentially slipping into the new year, with each subsequent train coming online about six months apart .
- Dividend: 4% increase to the quarterly dividend, raising it to $0.99 per share .
Q2 2024 Earnings Call
- Issued Period: Q2 2024
- Guided Period: FY 2024
- Guidance:
- Capital Expenditures (CapEx): $25 billion for the year, including the Pioneer acquisition .
- Production and Integration: Permian production at 1.2 million barrels per day, with expectations of delivering more synergies than initially announced .
- Earnings Growth: Increase earnings potential by an additional $12 billion over the next four years, reflecting a CAGR of more than 10% .
- Structural Cost Savings: Additional structural cost savings of over $5 billion by 2027 .
- Project Timelines: Golden Pass LNG project expected to see about a 6-month delay, with first LNG anticipated at the back end of 2025 .
- Product Solutions and New Markets: Progressing projects like Proxxima, with start-ups planned in 2025, and a total addressable market for Proxxima at 5 million tons and $30 billion by 2030 .
Q1 2024 Earnings Call
- Issued Period: Q1 2024
- Guided Period: FY 2024
- Guidance:
- Upstream Volumes: Seasonal scheduled maintenance expected to lower upstream volumes by about 40 KOEBD, with full-year production guidance at 3.8 million oil-equivalent barrels per day, excluding Pioneer .
- Product Solutions: Lower scheduled maintenance expected as they exit the peak of the 2024 turnaround season .
- Corporate and Financing Expenses: Expected to total $300 million to $500 million .
- Working Capital Impact: Unfavorable working capital impact of about $3 billion from seasonal cash tax payments .
- Capital Expenditures (CapEx): Guidance remains at $23 billion to $25 billion for the year .
Q4 2023 Earnings Call
- Issued Period: Q4 2023
- Guided Period: FY 2024
- Guidance:
- Capital Expenditures (CapEx): $23 billion to $25 billion to grow its portfolio of advantaged low-cost supply assets and reduce emissions .
- Structural Cost Savings: $15 billion in structural cost savings through 2027 .
- Low Carbon Solutions: Pursuing more than $20 billion of lower emission opportunities, with expected returns of approximately 15% .
- Permian Production: Volumes expected to grow to about 650,000 barrels per day in 2024, with a target of close to 1 million barrels per day by 2027 .
- Guyana Production: Optimizing operations with plans to continue optimizing production in this region .
Recent developments and announcements about XOM.
Financial Reporting
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Market Factors:
- Liquids Prices: Expected to decrease by $0.5 to $0.9 billion.
- Gas Prices: Anticipated to increase by $0.0 to $0.4 billion.
- Industry Margins: Declines are expected across energy, chemical, and specialty products, with reductions ranging from $0.3 to $0.7 billion depending on the segment.
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Planned and Seasonal Factors:
- Scheduled Maintenance: Minimal impact, ranging from -$0.1 to $0.1 billion.
- Year-End Inventory Effects: Expected to have a small impact, ranging from -$0.1 to $0.2 billion depending on the segment.
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Identified Items:
- Divestments: Positive impact of $0.3 to $0.5 billion.
- Impairments: Negative impact of -$0.3 to $0.5 billion.
- Tax-Related Items: Positive impact of $0.1 to $0.3 billion.
Earnings Report
Exxon Mobil Corporation (XOM) has announced that it will release its 4Q 2024 financial results on Friday, January 31, 2025, at approximately 5:30 a.m. CT. The results will be made available on the company's website and through a Form 8-K filing with the SEC. In case of technical difficulties with the EDGAR system, the information will still be accessible on the company's website at the scheduled time.
Additionally, Exxon Mobil has provided a detailed summary of factors expected to impact its 4Q 2024 earnings compared to 3Q 2024. Key considerations include:
These updates provide insights into the company's financial performance and the external and internal factors influencing its results. Investors are encouraged to review the full earnings release on January 31, 2025, for comprehensive details.