U.S. investment and research firm Zacks said in a recent analysis that Exxon Mobil Corporation has seen upward earnings estimate revisions for 2021 and 2022 in the past several days and so far for the year, the stock has gained 53.2%, outpacing the 35.1% improvement of the composite stocks belonging to the industry.
The favourable performance is being driven by improving oil prices and recovery in the market as well as Exxon’s pipeline of key projects in the Permian and the Stabroek Block offshore Guyana.
“In the Permian, ExxonMobil has an inventory of more than 8,000 well locations, with the integrated energy major estimating a net of 10 billion oil-equivalent barrels of recoverable resource. In offshore Guyana, ExxonMobil made several discoveries,” Zacks said, which are also currently estimated at approximately 10 billion oil-equivalent barrels of recoverable resource.
“Like upstream businesses, ExxonMobil also benefits from its downstream and chemical operations. Improving refining margins from the United States and non-U.S. operations and higher margins from the chemical businesses are aiding [its] bottom line,” Zacks said.
On October 27, Exxon announced its fourth-quarter dividend at 88 cents per share, reflecting an increase from 87 cents in the third quarter of this year. Following the increase, the integrated energy giant’s annual dividend for 2021 is $3.49 per share, higher than $3.48 in 2020.
Zacks said looking at the dividend history, it has been clear that ExxonMobil is strongly focused on returning capital to shareholders since over 39 consecutive years, it has hiked its annual dividend payment. ExxonMobil has also decided to launch up to a $10-billion share repurchase program next year. ExxonMobil will conduct the stock buyback program over 12 to 24 months.
“ExxonMobil has a bold plan for $15-billion investments over the next six years to lower greenhouse gas. Owing to its strong effort to reduce greenhouse gas emissions, [it] is now expecting to achieve its ambitious goal of 2025 emission-intensity reductions by 2021-end,” Zacks pointed out.
The oil major has made over 22 discoveries offshore Guyana since 2015 and is months away from starting up its second oil production project in the South American country with a third due in 2024 and a fourth the following year. The company expects to be operating 10 FPSOs at the Stabroek Block in the coming years with output surpassing the one million barrels per day mark before the end of the decade.