Exxon estimates doubling cash flow and earnings by 2027 and considering emission reduction

Exxon plans for doubling profits

Exxon Mobil announced a corporate investment plan on Wednesday that it claims will treble earnings and cash flow by 2027, while simultaneously lowering emissions. The idea comes as the oil giant rethinks its long-term strategy in the wake of the epidemic and a boardroom shake-up.

Through 2027, the corporation aims to spend between $20 billion and $25 billion per year, according to the company. This is greater than the $16 billion to $19 billion budgeted for 2021 by the corporation. However, the company predicted annual spending to be much lower than the $30 billion to $35 billion range before the epidemic took hold.

The plan, according to the business, provides “flexibility to adapt to adverse market conditions.”

In April 2020, U.S. oil momentarily fell into negative territory as the epidemic reduced demand for petroleum products, forcing energy corporations like Exxon to quickly slash expenses. Rather than merely focusing on growth, investors are now selecting companies that are focused on leaner operations and returning capital.

Announcing initial dividend hike amongst vital plans

Exxon announced its first dividend increase in more than two years in October, as well as plans to commence a $10 billion share repurchase program over the following 12 to 24 months.

In the future, the company intends to concentrate on high-quality assets, according to the corporation. Even if oil trades at $35 per barrel or below, Exxon claims that more than 90% of its new upstream assets will return more than 10%.

The price of oil in the United States was $69.16 a barrel on Tuesday. Prices have been erratic recently, with WTI falling sharply after breaching above $85 in October, highlighting the uncertainty surrounding oil’s long-term future.

“The better financial outlook and restored strength of our balance sheet encourage accelerated investment in our industry-advantaged. Darren Woods, Exxon’s chairman and chief executive officer, added, “It also contained high-return initiatives and a growing list of financially accretive lower-emission business possibilities.”

“By controlling our competitive benefits, our technique is aimed to produce shareholder value.” Preserving flexibility to comply with technological advancements and future legislative changes linked with the energy transition, on the other hand,” he noted.

Exxon has stated that it will invest $15 billion in emissions-reduction technologies. The funds will be used to reduce emissions from current activities as well as investments in areas such as carbon capture, according to the business.

Exxon’s stock rose 1.7 percent in premarket trade on the strength of a broader market rebound and this statement.


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