- Earnings and cash flow from operations
projected to approximately double by 2025
- Strongest investment opportunities in
two decades to drive results, improve returns
- Profitable production growth with
low-cost-of-supply tight oil, liquefied natural gas and
deepwater
ExxonMobil today outlined an aggressive growth strategy to more
than double earnings and cash flow from operations by 2025 at
today’s oil prices.
“We’ve got the best portfolio of high-quality, high-return
investment opportunities that we’ve seen in two decades,” Darren W.
Woods, chairman and chief executive officer, said at the company’s
annual meeting of investment analysts at the New York Stock
Exchange.
“Our plan takes full advantage of the company’s unique strengths
and financial capabilities, using innovation, technology and
integration to drive long-term shareholder value and
industry-leading returns.”
Growth plans include steps to increase earnings by more than 100
percent – to $31 billion by 2025 at 2017 prices – from last year’s
adjusted profit of $15 billion, which excluded the impact of U.S.
tax reform and impairments.
Woods said this plan projects double-digit rates of return in
all three segments of ExxonMobil’s business – upstream, downstream
and chemical – which are all three world-class businesses in their
own right.
In the upstream, the company expects to significantly increase
earnings through a number of growth initiatives involving
low-cost-of-supply investments in U.S. tight oil, deepwater and
liquefied natural gas (LNG). Growth coming online from new and
existing projects is expected to increase production from 4 million
oil-equivalent barrels per day to about 5 million.
The company plans to increase tight-oil production five-fold
from the U.S. Permian Basin and start up 25 projects worldwide.
Those startups will add volumes of more than 1 million
oil-equivalent barrels per day. In LNG, the company expects to
bring on new production to meet a projected increase in global
demand.
Upstream growth will benefit from ExxonMobil’s industry-leading
exploration success and strategic acquisitions. In 2017 alone, the
company added 10 billion oil-equivalent barrels to its resource
base in locations including the Permian, Guyana, Mozambique, Papua
New Guinea and Brazil.
Key drivers of growth are in Guyana, where exploration success
has added 3.2 billion gross oil equivalent barrels of recoverable
resource and plans are in place for development and further
exploration, and in the Permian, where the company has increased
the size of its resource to 9.5 billion oil-equivalent barrels from
less than 3 billion in the past year.
Through its acquisition of several Bass entities in 2017,
ExxonMobil added an estimated resource of 5.4 billion
oil-equivalent barrels in the Permian. The original resource
estimate of 3.4 billion barrels at the time of the purchase was
increased through technical evaluation and successful delineation
in the Delaware Basin, reducing the acquisition cost to just above
$1 per oil-equivalent barrel.
The contiguous stacked pays from the New Mexico acquisition are
now estimated to provide more than 4,800 drilling locations with an
average lateral length of more than 12,000 feet, enabling
capital-efficient execution of Permian volumes growth and the
potential to further increase future volumes.
“We are in a solid position to maximize the value of the
increased Permian production as it moves from the well head to our
Gulf Coast refining and chemical operations, where we are focusing
on manufacturing higher-demand, higher-value products,” Woods
said.
ExxonMobil’s downstream business is projected to double earnings
by 2025 by upgrading its product slate through strategic
investments at refineries in Baytown and Beaumont in Texas and
Baton Rouge, Louisiana, Rotterdam, Antwerp, Singapore, and Fawley
in the U.K.
These projects are expected to result in double-digit returns by
enabling increased production of higher-value products, such as
ultra-low sulfur diesel, chemicals feedstocks and basestocks for
lubricants. As a result of these improvements, the company’s 2025
downstream margins are projected to increase by 20 percent.
Expansion is supported by projected demand growth in emerging
markets, and includes entries into new markets such as Mexico and
Indonesia. It is supported by integration with chemical
manufacturing and upstream production.
In its chemical business, ExxonMobil expects to grow
manufacturing capacity in North America and Asia Pacific by about
40 percent. That growth will be achieved in part by adding 13 new
facilities, including two world-class steam crackers in the United
States. These investments would enable the company to meet
increasing demand in Asia and other growing markets.
“We are uniquely positioned to take advantage of the global
demand growth for higher-value products in the downstream and
chemical,” Woods said. “Our combined strengths in innovative
technology, resource and market access, marketing product
leadership and integration improve profitability and create
significant shareholder value.”
Woods said the company’s overall growth strategy is designed
with a key goal in mind – fully leveraging our competitive
advantages to grow shareholder value across all three of our
world-class businesses. Through higher returns from increased
investments, the company has the potential to increase its return
on capital employed to about 15 percent by 2025.
“Our existing business and plans for growth are robust to a wide
range of price environments, allowing us to maintain a growing
dividend and a strong balance sheet while returning excess cash to
our shareholders,” said Woods.
About ExxonMobil
ExxonMobil, the largest publicly traded international oil and
gas company, uses technology and innovation to help meet the
world’s growing energy needs. ExxonMobil holds an industry-leading
inventory of resources, is one of the largest refiners and
marketers of petroleum products and its chemical company is one of
the largest in the world. For more information, visit
www.exxonmobil.com or follow us on Twitter
www.twitter.com/exxonmobil.
Cautionary Statement:
Outlooks, projections, estimates, goals, targets, descriptions
of business plans and objectives, market expectations and other
statements of future events or conditions in this release are
forward-looking statements. Actual future results, including future
earnings, cash flows, returns, margins, and other areas of
financial and operating performance; demand growth and energy mix;
ExxonMobil’s production growth, volumes, development and mix;
resource recoveries; project plans, timing, costs, and capacities;
efficiency gains; operating costs and cost savings; integration
benefits; product sales and mix; production rates and capacities;
and the impact of technology could differ materially due to a
number of factors. These include changes in oil or gas demand,
supply, prices or other market conditions affecting the oil, gas,
petroleum and petrochemical industries; reservoir performance;
timely completion of exploration and development projects; regional
differences in product concentration and demand; war and other
political or security disturbances; changes in law, taxes or other
government regulation, including environmental regulations, taxes,
and political sanctions; the outcome of commercial negotiations;
the actions of competitors and customers; unexpected technological
developments; general economic conditions, including the occurrence
and duration of economic recessions; unforeseen technical
difficulties; and other factors discussed in Item 1A. Risk Factors
in our most recent Form 10-K available on our website at
www.exxonmobil.com.
Forward-looking statements contained in this release regarding
future earnings, cash flow, project returns, and return on average
capital employed (ROCE) are not forecasts of actual future results.
These figures are intended to help quantify the targeted future
results and goals of currently-contemplated management plans and
initiatives assuming a constant real Brent crude price of $60 per
barrel through 2025. This price is used for illustrative purposes
only and is not intended to represent management’s forecast of
future oil prices or the price management uses for internal
planning purposes. For the $60 crude price case we have assumed
that Downstream and Chemical product margins remain consistent with
2017 levels; that other factors such as laws and regulations
(including tax and environmental laws) and fiscal regimes remain
consistent with current conditions; and have otherwise developed
these estimates consistently with management’s internal planning
and modeling assumptions. The forward-looking statements in this
release are based on management’s good faith plans and objectives
as of the March 7, 2018 date of this release and we assume no duty
to update these statements as of any future date.
Adjusted earnings and ROCE are non-GAAP measures. Adjusted 2017
earnings of $15 billion as presented in this presentation represent
approximately $19.7 billion of GAAP earnings minus approximately $6
billion of positive effects from U.S. tax reform, partially offset
by approximately $1.5 billion of impairments for the year. For more
information on the definition and use of ROCE in our business see
the Frequently Used Terms on the Investors page of our website at
www.exxonmobil.com. Estimates of ROCE for future periods in this
release are determined in a manner consistent with this definition
but we are unable to provide a reconciliation to any GAAP financial
measure because the information is dependent on future events, many
of which are outside management’s control as described above.
Additionally, estimating GAAP measures to provide a meaningful
reconciliation of future ROCE estimates consistent with our
accounting policies for future periods is extremely difficult and
requires a level of precision that is unavailable for these future
periods and cannot be accomplished without unreasonable effort.
References in this release to oil-equivalent barrels, resources and
the resource base include quantities of oil and gas that are not
yet classified as proved reserves under SEC definitions but that
are expected to be moved into the proved reserves category and
produced in the future.
Unless referring specifically to ROCE, references to returns in
this release mean discounted cash flow returns based on current
company estimates. Future investment returns exclude prior
exploration and acquisition costs. The term “project” as used in
this release can refer to a variety of different activities and
does not necessarily have the same meaning as in any government
payment transparency reports.
This release summarizes highlights from ExxonMobil’s 2018
Analysts’ Meeting held on March 7, 2018. For more information
concerning the forward-looking statements and other information
contained in this release, please refer to the complete Analysts’
Meeting presentation (including important information contained in
the Cautionary Statement and Supplemental Information sections of
the presentation) which is available live and in archive form
through ExxonMobil’s website at www.exxonmobil.com.
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