- Industry-leading investment portfolio profitable at low prices
and flexible to market conditions
- Plans through 2025 increase earnings, cash flow to sustain and
grow dividend, reduce debt and advance advantaged projects
- Technology leadership to develop lower carbon solutions and
create future value
ExxonMobil today outlined its plans through 2025 to increase
earnings and cash flow to sustain and grow its dividend, reduce
debt and fund advantaged projects, while working to commercialize
lower emission technologies in support of the goals of the Paris
Agreement.
“We are fully committed to growing shareholder value by meeting
the world’s energy demands today and pursuing a technology-driven
strategy to succeed through the energy transition,” Darren Woods,
chairman and chief executive officer, said at the company’s annual
investor day.
“Our investment portfolio is the best we’ve had in over 20
years, and will grow earnings and cash flow in the near term while
remaining flexible to market conditions and benefiting from ongoing
cost-reduction efforts. Looking ahead, we’re working to reduce our
emissions and develop solutions, such as carbon capture and
low-carbon hydrogen, needed to de-carbonize the highest emitting
sectors of the economy – a critical requirement for society to
achieve its net zero ambition.”
ExxonMobil plans capital spending of $16-$19 billion in 2021 and
$20-$25 billion per year through 2025 on high-return,
cash-accretive projects. Spending plans can be modified to reflect
market conditions, as illustrated by successful efforts to preserve
the value of investment opportunities while reducing capital
spending by more than 30 percent in 2020 as a result of the
pandemic. The company also reduced cash operating expenses by 15
percent in 2020 and expects permanent structural savings of $6
billion a year by the end of 2023 versus 2019.
Future spending plans take into account potential market
volatility as the economy recovers from the pandemic.
“Our investments are expected to generate returns of greater
than 30 percent,” said Woods. “And 90 percent of our upstream
investments in resource additions, including in Guyana, Brazil and
the U.S. Permian Basin, generate a 10 percent return at $35 per
barrel or less. Downstream investments improve net cash margin by
30 percent and our Chemical investments grow high-value performance
products by 60 percent.”
To grow shareholder value through the transition to a lower
carbon economy, ExxonMobil has focused its extensive research and
development portfolio on technologies to address hard to
de-carbonize sectors of the economy responsible for approximately
80 percent of energy-related emissions -- commercial
transportation, power generation and heavy industry.
The company’s newly created business, ExxonMobil Low Carbon
Solutions, was established to commercialize low-emission
technologies, and will initially focus on carbon capture and
storage (CCS), the process of capturing CO2 that would otherwise be
released into the atmosphere from industrial activity, and
injecting it into deep geologic formations for safe, secure and
permanent storage.
ExxonMobil is the industry leader in CCS technology and has more
than 30 years of experience capturing carbon. The company has an
equity share in about one-fifth of global CO2 capture capacity and
has captured approximately 40 percent of all the captured
anthropogenic CO2 in the world. ExxonMobil also produces about 1.3
million tonnes of hydrogen per year and is developing technology
that could significantly lower the cost of both CCS and low-carbon
hydrogen.
The International Energy Agency projects that CCS could mitigate
up to 15 percent of global emissions by 2040 and the authoritative
U.N. Intergovernmental Panel on Climate Change (IPCC) estimates
that global de-carbonization efforts could be twice as costly
without CCS.
Using estimates and demand projections, including from IPCC
Lower 2 degree Celsius scenarios, the market for CCS and other
low-emission technologies and products is expected to grow
significantly by 2040.
“Our development of next-generation technologies and existing
businesses positions us well to capitalize on the growing demand
for de-carbonization and market opportunities that are increasingly
coming together to support lower-carbon energy solutions,” said
Woods.
ExxonMobil met its 2020 emission reduction goals that included
15 percent reduction in methane emissions versus 2016 levels, and a
25 percent reduction in flaring versus 2016 levels.
The company’s 2025 emission reduction plans include a 15 to 20
percent reduction in upstream greenhouse gas intensity versus 2016
levels, supported by a 40 to 50 percent reduction in methane
intensity and 35 to 45 percent reduction in flaring intensity.
The plans are expected to reduce absolute greenhouse gas
emissions by an estimated 30 percent for the Upstream business.
Absolute flaring and methane emissions are expected to decrease by
40 to 50 percent under the plans. The company also aims for
industry-leading greenhouse gas performance and to eliminate
routine flaring in line with the World Bank initiative by 2030.
The company’s investor day presentations are available on its
Investor Relations site at exxonmobil.com.
About ExxonMobil ExxonMobil, one of the largest publicly
traded international energy companies, 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. To learn
more, visit exxonmobil.com and the Energy Factor.
Follow us on Twitter and LinkedIn.
Cautionary Statement:
Outlooks; projections; goals; estimates; descriptions of
strategic plans and objectives; planned capital and cash operating
expense reductions and the ability to meet or exceed announced
reduction objectives; plans to reduce future emissions intensity
and the expected resulting absolute emissions reductions; emission
profiles of future developments; carbon capture results and the
impact of operational and technology efforts; future business
markets like carbon capture or hydrogen; the impacts of the
COVID-19 pandemic and corresponding market impacts on ExxonMobil’s
businesses and results; price and market recoveries; energy market
evolution; recovery and production rates; rates of return;
development plans; future distributions and debt levels; product
mix and sales growth; and other statements of future events or
conditions in this release are forward-looking statements. Actual
future results could differ materially due to a number of factors.
These include global and regional changes in the demand, supply,
prices, differentials or other market conditions affecting oil,
gas, petroleum, petrochemicals and feedstocks; company actions to
protect the health and safety of employees, vendors, customers, and
communities; the ability to access short- and long-term debt
markets on a timely and affordable basis; the severity, length and
ultimate impact of COVID-19 and government responses on people and
economies; global population and economic growth; reservoir
performance and depletion rates; the outcome of exploration
projects and the timely completion of development and construction
projects; regional differences in product concentration and demand;
war, trade agreements, shipping blockades or harassment and other
political, public health or security concerns; changes in law,
taxes or regulation, including environmental regulations, taxes,
political sanctions and international treaties; the timely granting
or freeze, suspension or revocation of government permits; the
impact of fiscal and commercial terms and the outcome of commercial
negotiations; feasibility and timing for regulatory approval of
potential investments or divestments; the actions of competitors
and preferences of customers; the capture of efficiencies within
and between business lines; unexpected technological developments;
general economic conditions, including the occurrence and duration
of economic recessions; unforeseen technical or operating
difficulties; the ability to bring new technologies to commercial
scale on a cost-competitive basis, including large-scale hydraulic
fracturing projects and carbon capture projects; and other factors
discussed here, in Item 1A. Risk Factors in our Form 10-K for the
year ended December 31, 2020 and under the heading "Factors
Affecting Future Results" on the Investors page of our website at
www.exxonmobil.com under the heading News & Resources. The
forward-looking statements in this release are based on
management’s good faith estimates, plans and objectives as of the
March 3, 2021 date of this release. We assume no duty to update
these statements as of any future date.
Forward-looking statements contained in this release regarding
the potential for future earnings, cash flow, margins, returns,
rate of return, future market sizes, cash operating expenses, and
net cash margin are not forecasts of actual future results. These
figures are provided to help quantify the potential future results
and goals of currently-contemplated management plans and objectives
including new project investments, plans to replace natural decline
in Upstream production with low-cost volumes, plans to increase
sales in our Downstream and Chemical segments and to shift our
Downstream and Chemical product mix toward higher-value products,
continued high-grading of ExxonMobil’s portfolio through our
ongoing asset management program, announced and continuous
initiatives to improve efficiencies and reduce costs, capital
expenditures and cash management, and other efforts within
management’s control to impact future results as discussed in this
release. These figures are intended to quantify for illustrative
purposes management’s view of the potentials for these efforts over
the time periods shown, calculated on a basis consistent with our
internal modelling assumptions for factors such as working capital,
as well as factors management does not control, such as interest,
differentials, and exchange rates. Price points referred to in this
release are not intended to reflect ExxonMobil’s forecasts for
future prices or the prices we use for internal planning
purposes.
ExxonMobil-operated emissions, reductions and avoidance
performance data are based on a combination of measured and
estimated data using best available information. Calculations are
based on industry standards and best practices, including guidance
from the American Petroleum Institute (API) and IPIECA. The
uncertainty associated with the emissions, reductions and avoidance
performance data depends on variation in the processes and
operations, the availability of sufficient data, the quality of
those data and methodology used for measurement and estimation.
Changes to the performance data may be reported as updated data
and/or emission methodologies become available. ExxonMobil works
with industry, including API and IPIECA, to improve emission
factors and methodologies. Emissions, reductions and avoidance
estimates from non-ExxonMobil operated facilities are included in
the equity data and similarly may be updated as changes to the
performance data are reported. The data includes XTO Energy
performance beginning in 2011.
Definitions and additional information concerning certain terms
used in this release including cash operating expense and net cash
margin are provided in the Frequently Used Terms available on the
Investor page of our website at www.exxonmobil.com under the
heading News & Resources and in the March 3, 2021 Analysts’ Day
material referenced below. Reconciliations of non-GAAP terms are
provided for historical periods but not for future periods. We are
unable to provide a reconciliation of forward-looking non-GAAP or
other measures to the most comparable GAAP financial measures
because the information needed to reconcile these measures is
dependent on future events, many of which are outside management’s
control as described above. Additionally, estimating such GAAP
measures and providing a meaningful reconciliation 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. Forward-looking non-GAAP measures are estimated in a manner
consistent with the relevant definitions and assumptions noted
above.
This release references third party scenarios such as the 74
Lower 2°C scenarios, made available through the IPCC SR 1.5
scenario explorer data and the IEA Sustainable Development
Scenario. These third party scenarios reflect the modeling
assumptions and outputs of their respective authors, not
ExxonMobil, and their use and inclusion herein is not an
endorsement by ExxonMobil of their likelihood or probability. The
analysis done by ExxonMobil on the IPCC Lower 2°C scenarios and the
representation thereof aims to reflect the average or trends across
a wide range of pathways. Where data was not or insufficiently
available, further analysis was done to enable a more granular view
on trends within these IPCC Lower 2°C scenarios as described in
more detail in the complete March 3, 2021 Analysts’ Meeting
presentation referenced below.
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. The
term “performance products” refers to chemical products that
provide differentiated performance for multiple applications
through enhanced properties versus commodity alternatives and bring
significant additional value to customers and end-users.
This release summarizes highlights from ExxonMobil’s 2021
Analysts’ Meeting held on March 3, 2021. For more information
concerning the forward-looking statements, defined terms, 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.
Important Additional Information Regarding Proxy
Solicitation
Exxon Mobil Corporation (“ExxonMobil”) has filed a preliminary
proxy statement and form of associated BLUE proxy card with the
U.S. Securities and Exchange Commission (the “SEC”) in connection
with the solicitation of proxies for ExxonMobil’s 2021 Annual
Meeting (the “Preliminary Proxy Statement”). ExxonMobil, its
directors and certain of its executive officers will be
participants in the solicitation of proxies from shareholders in
respect of the 2021 Annual Meeting. Information regarding the names
of ExxonMobil’s directors and executive officers and their
respective interests in ExxonMobil by security holdings or
otherwise is set forth in the Preliminary Proxy Statement. To the
extent holdings of such participants in ExxonMobil’s securities are
not reported, or have changed since the amounts described, in the
Preliminary Proxy Statement, such changes have been reflected on
Initial Statements of Beneficial Ownership on Form 3 or Statements
of Change in Ownership on Form 4 filed with the SEC. Details
concerning the nominees of ExxonMobil’s Board of Directors for
election at the 2021 Annual Meeting are included in the Preliminary
Proxy Statement. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND
SHAREHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT
DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE
COMPANY’S DEFINITIVE PROXY STATEMENT AND ANY SUPPLEMENTS THERETO
AND ACCOMPANYING BLUE PROXY CARD WHEN THEY BECOME AVAILABLE,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and
shareholders will be able to obtain a copy of the definitive proxy
statement and other relevant documents filed by ExxonMobil free of
charge from the SEC’s website, www.sec.gov. ExxonMobil’s
shareholders will also be able to obtain, without charge, a copy of
the definitive proxy statement and other relevant filed documents
by directing a request by mail to ExxonMobil Shareholder Services
at 5959 Las Colinas Boulevard, Irving, Texas, 75039-2298 or at
shareholderrelations@exxonmobil.com or from the investor relations
section of ExxonMobil’s website, www.exxonmobil.com/investor.
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