ExxonMobil expects earnings to jump 140% by 2025

Oil supermajor ExxonMobil said Wednesday it expects annual earnings potential to increase by more than 140% by 2025 from 2017 adjusted earnings, assuming $60 a barrel oil, and based on 2017 margins.

“Given the success we experienced last year and the progress we’re making on our plans, we have even greater confidence in our ability to grow value for our shareholders,” Darren W. Woods, chairman and CEO, said during Day Two of the company’s annual investor day at the New York Stock Exchange.

During Day one of the meeting, ExxonMobil outlined its production plans going forward, much of which centers on the U.S.’s Permian Basin.

ExxonMobil expects its Permian production to increase to roughly 1 million brrels of oil-equivalent per day (Mmbpd) – a nearly 80% jump from 2018’s investor day forecast.

During Day Two of the investor meetings, the oil supermajor concentrated a great deal on financials. The company’s updated earnings projection compares with 2018’s estimated increase of 135% between 2017 and 2025, based on 2017 adjusted earnings.

Earnings potential jumps

Cumulative earnings potential from 2019 through 2025 has increased by roughly $9 billion, supported by further improvements to the company’s investment portfolio and divestment plans.

ExxonMobil expects annual cash flow from operations to reach $60 billion in 2025, again assuming $60 crude and 2017 margins. Cumulative cash flow from operations and asset sales from 2019 to 2025 is $24 billion higher than projections at last year’s analyst meeting, including $15 billion from anticipated asset sales from 2019 to 2021.

The company expects to double its return on capital employed by 2025, under the $60/Bbl price scenario described during last year’s investor day.

Growth benefits from exploration success

In its upstream operations, growth will benefit from ExxonMobil’s exploration success and progress in development plans. In 2018, the company added 1.3 billion barrels of oil-equivalent (Bboe) to its resource base, which included additions from new discoveries and acquisitions, primarily in Guyana and Brazil.

In Guyana, the estimated gross recoverable resource from the Stabroek Block is roughly 5.5 Bboe. That compares with the updated resource estimate late last year of more than 5 Bboe.

However, to make big money, ExxonMobil intends to spend big money going forward. The company expects its capital spending to grow by $4 billion this year, to $30 billion.

In 2020, ExxonMobil expects to spend $33 billion to $35 billion, and $30 billion to $35 billion in the following years, through 2025.

Source: kallanishenergy