Release Date: January 31, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Exxon Mobil Corp (XOM, Financial) delivered strong financial results with earnings of $34 billion in 2024, marking the third highest result in a decade.
- The company achieved a significant reduction in methane intensity, over 60% since 2016, showcasing its commitment to environmental performance.
- Exxon Mobil Corp (XOM) reported record production levels in the Permian and Guyana, highlighting successful operational execution.
- The company is advancing its low carbon solutions, with a unique end-to-end system for capturing, transporting, and storing carbon emissions.
- Exxon Mobil Corp (XOM) has a robust pipeline of major projects set to start in 2025, expected to deliver over $3 billion in earnings potential by 2026.
Negative Points
- Despite strong earnings, Exxon Mobil Corp (XOM) faces softer market conditions, which could impact future financial performance.
- The company is involved in legal disputes, such as the lawsuit against the California Attorney General, which could pose reputational risks.
- Exxon Mobil Corp (XOM) relies on government incentives for some low-carbon projects, indicating potential vulnerability to policy changes.
- The chemical market remains challenging, with margins consistently below the 10-year average, affecting profitability in this segment.
- Exxon Mobil Corp (XOM) has limited presence in the Gulf of Mexico, potentially missing out on opportunities in this region.
Q & A Highlights
Q: Can you provide an update on the key milestones for the Guyana project in 2025 and its long-term capacity?
A: We feel confident about our 2025 project start-ups, including Guyana's Yellowtail, which is tracking well and may come in ahead of schedule. We anticipate production to start in Q3 2025. Long-term capacity is challenging to predict due to various factors, but we aim to optimize reservoir management and expect to exceed current estimates.
Q: How will potential North American tariffs impact ExxonMobil's operations?
A: We focus on being a cost-competitive, low-cost supply source. Tariffs will shift market dynamics, but our strategy remains to operate efficiently and produce high-value products, ensuring we outperform competitors regardless of market changes.
Q: What is ExxonMobil's strategy for data centers and low-carbon solutions?
A: We aim to offer decarbonized power for data centers, leveraging our carbon capture and storage capabilities. There's strong market interest in decarbonized data centers, and we expect to have a site operational by 2028, with decarbonization by 2029. Recent developments with DeepSeek have not affected customer discussions.
Q: Can you elaborate on the timing and impact of key projects on earnings in 2025?
A: We have several projects starting in 2025, including the China Chemical Complex and Singapore Resid Upgrade. These projects are expected to contribute over $3 billion in earnings by 2026, even under current challenging market conditions. We aim for resilience in bottom-of-cycle conditions.
Q: How does ExxonMobil view its cash distribution strategy, particularly regarding buybacks and dividends?
A: Our buyback pace increased to $20 billion annually, coinciding with the Pioneer acquisition, but this is coincidental. We focus on sustainable, competitive, and growing dividends, having increased them for 42 consecutive years. Our buyback program also reduces the overall dividend in absolute terms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
