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Global Industry: ExxonMobil expects earnings to increase by over 140% by 2025

U.S. oil major ExxonMobil has updated its growth plans and expects annual earnings potential to increase by more than 140 percent by 2025 from 2017 adjusted earnings, assuming an oil price of $60 per barrel 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 chief executive officer, said at the company’s annual investor day at the New York Stock Exchange.

“We are exceeding the pace of our expected progress on the aggressive growth strategy we laid out last year,” Woods said.

ExxonMobil’s updated earnings projection compares with last year’s estimated increase of 135 percent between 2017 and 2025, based on 2017 adjusted earnings. Cumulative earnings potential from 2019 through 2025 has increased by about $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, assuming oil prices at $60 per barrel and 2017 margins. Cumulative cash flow from operations and asset sales over the period from 2019 to 2025 is $24 billion higher than what was communicated at last year’s analyst meeting, including $15 billion from anticipated asset sales from 2019 to 2021.

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

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

In Guyana, the estimated gross recoverable resource from the Stabroek Block is approximately 5.5 billion oil-equivalent barrels. That compares with the updated resource estimate late last year of more than 5 billion oil-equivalent barrels.

In Brazil, ExxonMobil has built a position of 2.3 million acres, adding 800,000 acres in 2018.

A key liquefied natural gas (LNG) project in Mozambique is on track for final investment decision this year.

The Papua New Guinea LNG project is progressing. In February 2019 the company sanctioned the Golden Pass LNG project to capitalize on the low cost supply of U.S. natural gas and the expected growth in global LNG demand.

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