Exxon Mobil stock has been on a tear over the past year as oil prices have climbed higher.
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Exxon Mobil said it plans to double its earnings potential by 2027 at a time when energy giants find themselves buoyed by sky-high oil prices.
The company laid out planned savings of $9 billion a year by 2023 compared with 2019 levels at its annual investor day—which, alongside structural changes, should boost results and shareholder returns.
This should see earnings and cash flow potential double by 2027 from 2019 levels, according to Exxon Mobil (ticker: XOM).
“We are focused on leading the industry in safety, reliability, environmental performance, earnings and cash flow growth—and ultimately shareholder returns,” Darren Woods, chair and CEO, said in a statement.
Exxon Mobil said that it was leveraging low-cost-of-supply opportunities in Guyana and the Permian Basin to juice up earnings, as well as investing in chemicals and downstream products. Capital investment is expected to be in the range of $20 billion to $25 billion each year for the next five years to realize these goals, the company said.
In addition, the group pledged to spend some $15 billion over the next six years to reduce carbon emissions and invest in lower-emissions businesses.
Exxon Mobil’s announcement echoes that of fellow U.S. oil major Chevron , which said on Tuesday that it will ramp up share buybacks as it expects higher returns across the next four years.
The plan to juice up earnings and seek cheaper supplies comes as oil prices trade at their highest levels in almost a decade. Front-month futures for West Texas Intermediate crude surged 6% Wednesday to above $109 a barrel, having breached $110 in earlier trading for the first time since 2013.
WTI futures were trading at just $76 when the year started. Global oil supplies have been tight for months as demand has come roaring back from the Covid-19 pandemic.
Russia’s invasion of Ukraine in the past week has exacerbated supply fears as traders shun Russian oil, pushing prices almost 20% higher since Moscow launched its full-scale attack last Thursday.
Exxon Mobil separately announced that it would exit a multibillion-dollar oil and gas project in Russia and halt investments in the country in response to the Russian invasion.
Exxon Mobil stock was up 1.7% on Wednesday, in line with energy peers. The shares have surged more than 41% over the past year.
Write to Jack Denton at [email protected]
