|Bid||42.79 x 900|
|Ask||42.80 x 900|
|Day's range||41.91 - 43.31|
|52-week range||30.11 - 83.49|
|Beta (5Y monthly)||1.27|
|PE ratio (TTM)||12.65|
|Earnings date||30 Apr 2020|
|Forward dividend & yield||3.48 (8.60%)|
|Ex-dividend date||09 Feb 2020|
|1y target est||48.90|
(Bloomberg) -- Oil held on to small gains as investors searched for signals that the world’s biggest producers will be able to strike a deal to end a price war and stabilize energy markets.Futures in New York rose more than 4% on Tuesday before trading close to little changed. Saudi Arabia and Russia are hammering out terms to a production agreement with OPEC+ talks planned for Thursday and a G-20 meeting of energy ministers set for Friday, according to people familiar with the matter.“There is uncertainty over whether a deal would be reached among OPEC+,” said Gene McGillian, vice president of market research at Tradition Energy. “That’s why we are seeing the market come off a bit.”Meanwhile, timespreads for West Texas Intermediate crude futures are at the weakest since 2011. Supplies at the key Cushing, Oklahoma, supply hub are sitting at the highest since November and concern over a further increase in U.S. supply is also keeping any large price rally at bay.U.S. crude futures are hovering just above $26 a barrel, down more than 50% so far this year. Shale drillers are reacting to the price environment: Continental Resources Inc. is cutting production this month and next, while Exxon Mobil Corp. is slashing $10 billion in spending.An effective supply deal will require all of the three top producers -- the U.S., Saudi Arabia and Russia -- to participate. While Riyadh and Moscow are set to cut output significantly, according to people with knowledge of the negotiations, Washington is more likely to offer up gradual reductions. The G-20 may be a more acceptable forum to bring on board the U.S. and other big producers outside the OPEC+ alliance, such as Canada and Brazil.Even if a production-cut deal is reached, the bigger question is whether reductions would be enough to offset a demand meltdown spurred by the Covid-19 outbreak.See also: In the Big OPEC++ Output Deal, Who’s In and Who’s Out?Meanwhile, some old-guard Texas oil drillers are urging state regulators to clamp down on crude output. The largest U.S. oil-producing state hasn’t restricted production in almost 50 years but a growing chorus of explorers and related industries are advocating just such a move.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Exxon Mobil Corp. is slashing $10 billion in spending -- more than any other supermajor oil explorer has cut to weather an unprecedented market collapse -- and yet its production in North America’s biggest shale region is still forecast to rise.It’s a projection that flies in the face of growing calls for the world’s largest oil producers to show restraint as OPEC and its allies prepare for emergency talks about arresting free-falling prices this week. Exxon on Tuesday announced a 30% reduction in capital spending, the second-largest cut in the company’s modern history. The stock surged more than 6%.But despite budget cuts that are twice as deep as any other supermajor’s, Exxon said Permian output will still grow to the equivalent of 345,000 barrels a day this year, about 4% below the previous forecast. In 2021, that will jump to about 475,000 barrels.The world’s second-largest oil producer by market value left out of Tuesday’s statement any mention of whether the austerity measures will impact its overall global production. But Exxon is prepared to tighten its belt even more should energy markets continue to deteriorate.“As market conditions evolve, the company will continue evaluating the impacts of decreased demand on its 2020 production levels as well as longer-term production impacts,” the company said.Free MarketExxon, which styles itself a staunch opponent of government intervention in markets, is urging Texas regulators to reject a proposal to cap in-state crude output for the first time in almost half a century. The Texas Railroad Commission is scheduled to discuss the idea on April 14 and Exxon finds itself at odds with an expanding alliance of small drillers who support the plan.The big question facing global oil markets right now is whether the U.S. will join Russia, Saudi Arabia and the rest of the Organization of Petroleum Exporting Countries in coordinated production cuts to balance the massive demand destruction caused by Covid-19.Exxon Chief Executive Officer Darren Woods bemoaned the terrible state of oil markets during a conference call with reporters on Tuesday.Exxon is in a “capital intensive commodity business that’s used to ups and downs in price cycles, however I have to say we haven’t seen anything like what we’re experiencing today,” Woods said. “These are definitely challenging times for all of us.”Global BusinessSaudi Arabia, the world’s largest exporter, has made it clear it’s not willing to bear the brunt of any cuts alone and wants the U.S., Canada and others to join.Even as Exxon’s production juggernaut chugs on, smaller U.S. rivals including Continental Resources Inc. and Texland Petroleum LP are trimmng output.“Our position has always been one of free markets,” Woods said during the conference call. “It allows the free flow of product, it also ensures that the most efficient producers can continue to produce. Free trade, low trariffs is what’s best for the globe and for our business long term.”The scope of Exxon’s spending cut from $33 billion to $23 billion this year exceeded the expectations of some analysts including those at Goldman Sachs Group Inc. who forecast a reduction to $29 billion. A major liquefield natural gas project in Mozambique will be delayed, as will the third stage of an offshore development in Guyana, while refining and chemical expansions also may be slowed, Exxon said without providing specifics.Although every oil explorer is grappling with how to manage the price collapse, the pullback is particularly painful for Woods because he so recently staked the future on investing heavily through the downturn.Supermajors Royal Dutch Shell Plc, Chevron Corp. and Total SA halted share buybacks to preserve dividend programs. Exxon sacrificed buybacks in 2016 during the last market crash and has instead funneled all excess cash toward dividends and new projects.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- About $25 billion of oil and gas deals are hanging in the balance following crude’s historic collapse, potentially doing further harm to the finances of companies already battered by the slump.Companies including Occidental Petroleum Corp., BP Plc and Exxon Mobil Corp. are relying on asset sales started last year to bolster their finances. But many deals look less attractive now with oil near $30 a barrel and a bleak outlook for the global economy, according to consultant Wood Mackenzie Ltd.As oil companies around the world scramble to protect their finances by boosting credit lines, slashing spending and suspending buybacks, those leaning too heavily on asset sales may need to find other measures.“I think they’re going to be extremely difficult to execute in the near term,” said Greig Aitken, director of M&A research at WoodMac. “It’s borderline impossible for the next few months.”Valuations have been hit hard by the slump. Infections and deaths from the coronavirus pandemic are still climbing, and large parts of the world are likely heading toward a recession. While OPEC and other major producers are planning talks this week to help steady the market, immense output cuts would be required to compensate for a demand destruction that some traders estimate has risen to as high as 35 million barrels a day.Failed asset sales would only make matters worse for the companies, Aitken said. Oil majors have an additional $27 billion of planned disposals beyond what has been announced.Occidental may have the most to lose from a freeze in the market. The U.S. shale producer has a pile of debt due over the next two years and is depending on asset sales to pay it.A key pillar of its purchase of Anadarko Petroleum Corp. last year was selling off its African assets to Total SA for $8.8 billion. But the disposal of operations in Ghana and Algeria, valued at almost $5 billion, is yet to be signed off.Total can walk away from both transactions should Algeria not give approval by Sept. 30, according to Morgan Stanley. The government there has suggested it may seek to preempt the purchase of the asset, adding further uncertainty to an already stressed market. Ghana meanwhile is claiming $500 million in taxes, complicating the deal.Total declined to comment on the status of the agreements. The French major is pushing ahead with its own $5 billion divestment plan, and on Tuesday closed the sale of more than $400 million of assets in Brunei and West Africa.Occidental referred Bloomberg to remarks from Chief Executive Officer Vicki Hollub in February that there’s “increased risk” associated with the Algeria and Ghana sales. But she pledged to reach her target of raising $15 billion from selling assets, with or without the Africa deals.Wyoming SaleOccidental also wanted to sell land in Wyoming, which state authorities had expressed interest in buying. However, the outbreak of the virus may complicate the state’s efforts to get that deal done, according to Devin McDermott, a New York-based analyst at Morgan Stanley.“There are a lot more pressing issues that every state including Wyoming has to focus on right now,” he said.Even so, Wyoming Governor Mark Gordon said he will “continue to find ways to take steps to explore this opportunity” despite the coronavirus and legislative hurdles in a letter dated March 26. Hollub said the bidding was a “competitive process,” indicating the interest of other bidders.BP to ExxonOthers oil companies including BP, Exxon and smaller players in the North Sea have also been looking to sell.In early February, BP said it would boost its divestment program from $10 billion to $15 billion by the middle of next year. It said last week it’s still on track to hit that target. The company had agreed more than $9 billion of deals by the end of last year, about $5.6 billion of which will come from the pending sale of its Alaskan business to Hilcorp Energy Co.Some deal completions may be revised, “particularly while volatile market conditions persist,” BP said last week, adding that it expects the Hilcorp transaction to go through. Hilcorp didn’t respond to a request for comment.Exxon, already paying its dividend with borrowed money, has been relying on asset sales to bolster its financial position as it attempts to build a series of mega-projects in one of the worst oil markets in decades. Announcing a pullback in its ambitions on Tuesday, the company said it would reduce spending this year by 30% to $23 billion. Exxon is targeting about $10 billion of disposals by the end of next year with assets in the Gulf of Mexico, Azerbaijan and Malaysia on offer. But Senior Vice President Neil Chapman sought to temper expectations for successful sales at Exxon’s analyst day in March.“We don’t expect success on every asset that we put in the market,” he said. “If the value is not there, we’re not going to transact.”Bleak OutlookThe grim macroeconomic outlook is making it “doubly important” that any announced deals close, WoodMac’s Aitken said. But that’s difficult to do since potential buyers are focusing on existing portfolios and looking to conserve cash rather than seeking new opportunities.“Asset sales are extremely challenging right now,” said Morgan Stanley’s McDermott. “In the low oil-price environment we’re in right now, the universe of buyers just dries up.”(Updates with Total’s asset sales in Brunei in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Exxon Mobil Corp on Tuesday throttled back investment in shale, natural gas and deep water production, cutting planned capital spending by 30% this year as the coronavirus pandemic saps energy demand and oil prices tumble. Oil companies have pulled back 2020 spending plans by an average of 22% as countries limit air travel, order businesses closed and tell residents to stay home to combat the pandemic that has killed more than 76,000 worldwide. "We haven’t seen anything like what we’re experiencing today," Exxon Chief Executive Darren Woods said on Tuesday as he detailed spending cuts on a conference call.
Additionally, gold futures rose 0.7% to $1,705.10/oz, after earlier climbing to a new seven-year high of $1,742.20, while EUR/USD traded at $1.0875, up 0.8%.
Qatar Petroleum (QP) is pressing ahead with foreign as well as domestic expansion despite the global market turmoil caused by the coronavirus pandemic, its chief executive told Reuters on Monday. Saad al-Kaabi, who heads the energy portfolio of the world's top liquefied natural gas (LNG) supplier, also said the company could seek to raise debt next year for its domestic North Field LNG expansion. Qatar, a tiny but wealthy country is one of the most influential LNG market players with annual production of 77 million tonnes.
Oil major ExxonMobil has not changed its capex strategy where others have, and as a result of the price collapse, the supermajor now has to take on a lot of additional debt
As prices crashed, the supermajors resorted to one of the last tools they have before starting to potentially consider the painful idea of cutting dividends, taking on more debt
A union official accused Exxon Mobil Corp on Friday of using "scare" tactics and exploiting economic uncertainty caused by the coronavirus pandemic in negotiations with workers at its Baytown, Texas, refinery, allegations the company denied. Exxon has begun meeting with small groups of union-represented employees after rejecting two contract extension proposals from the union, said Ricky Brooks, president of United Steelworkers union local 13-2001, which represents hourly workers at Baytown. Exxon spokesman Todd Spitler said the company's focus was on the safety of its workforce.
(Bloomberg Opinion) -- Venerable apparel retailer Brooks Brothers says it is “in the process of converting its New York, North Carolina and Massachusetts factories from manufacturing ties, shirts and suits to now making masks and gowns.” Michigan-based workwear maker Carhartt is shifting over to mask and gown production, too. In Houston, Gourmet Table Skirts & Linens, which normally sells to hotels and cruise ships, has gone all-in on surgical masks.These are encouraging signs for a country that remains way short on the personal protective equipment needed by health-care workers treating patients with Covid-19 — and eventually by the rest of us to help keep the disease from continuing its spread. But you’re not going to see a lot more announcements like these by U.S. apparel manufacturers, because there aren’t a lot more U.S. apparel manufacturers. Employment in the industry was actually up slightly in March — unlike employment in just about every other industry — but it has fallen 89% since 1990. In textile manufacturing, it’s down 79%.Manufacturing employment overall is down over that stretch too, of course, but by a much smaller 28%. And real value added by manufacturing (its contribution to gross domestic product, basically) is up 52% since 1997, when that data series begins, so part of the story is that productivity gains have allowed U.S. manufacturers to make more with fewer workers. For apparel, though, real value added is down 65% since 1997 and for textiles it’s down 39%, and while the latter has seen production rebound a bit over the course of the current expansion, apparel has not.Apparel making for the U.S. market basically moved overseas, with a quick look through my closet revealing “made in” labels from China, Honduras, Indonesia, Madagascar, Malaysia and Mauritius. It had not been what you’d call a high-value industry, and the pay for workers certainly wasn’t great. U.S. consumers seem to have gained from the shift, with clothing and footwear’s share of consumer spending falling from 5.2% in 1990 to 2.7% last year. Still, it left a lot of jobs to replace and has left the country short-handed at a time when the ability to sew things is suddenly and unexpectedly of great value.To be sure, most of the protective respirators and the surgical masks in use today are not the product of traditional textile manufacturing or cut-and-sew production. They are generally made of spun or blown plastics — Chinese oil and petrochemicals company Sinopec has a peppy video about the factory it built over 12 days in February and early March that can produce 1.2 million N95 respirators or 6 million surgical masks a day. The U.S. still has a huge petrochemicals industry, and the biggest company in it, Exxon Mobil, announced Thursday that it is working with the Global Center for Medical Innovation in Atlanta “to rapidly redesign and manufacture reusable personal protection equipment for health care workers.” That’s good news. But in the meantime, it’s nice that Brooks Brothers, Carhartt and Gourmet Table Skirts & Linens are still around to fill in some of the gaps.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Crude prices notched a record weekly gain of as much as 37% on OPEC jawboning and President Donald Trump's tweets that he expected world oil producers to resume production cuts. A drop in the U.S. oil rig count, however, showed that drillers in the country had already begun work to balance a market left incredibly oversupplied by the Covid-19 pandemic. Trump tweeted on Thursday that he had brokered a deal for Saudi Arabia, Russia and other oil producers to cut between 10 million and 15 million barrels of supply from daily world output.
Oil's collapse has become more of a demand issue, making a potential deal between Russia and Saudi Arabia less impactful, says oil analyst and editor of The Schork Report Stephen Schork.