Breakingviews

Shareholders give Exxon the benefit of the doubt

February 2, 2015

The oil major is keeping mum on spending plans even as rivals cut back. And it only beat Q4 estimates thanks to tax and legal breaks. Unlike Chevron, though, Exxon is still buying back stock, if less than before. Such relative resilience appeals to investors, but might not last.

Apple’s cash is key to unlocking suppressed value

January 30, 2012

Though it’s the world’s most valuable company, the iPhone maker doesn’t get full credit for its near-$100 bln cash hoard or its growth. A huge special dividend could be close to a free lunch. And regularly paying out half its earnings could show why Apple may be worth $1 trln.

Exxon’s fracking gag makes Chesapeake look good

May 30, 2012

That’s a rare feat. The troubled gas firm is infamously opaque. But Chesapeake’s openness on the risks of fracking puts larger rivals like Exxon to shame. After another large minority vote from investors for more information, Big Oil should follow its troubled cousin’s lead.

Chemicals give Exxon half a reason for integration

March 25, 2011

Giant energy firms tend to treat their chemicals units as poor relations. The big exception is Exxon Mobil, whose chemicals business is now benefiting from speedy Asian growth. That gives the biggest oil major an argument for vertical integration that rivals don't have -- but it's only partially convincing.

2012 may be as good as it gets for Exxon

February 1, 2013

The oil giant pumped out a near-record profit and its best earnings per share ever. But Exxon, like Chevron, is spending huge sums – almost $40 bln last year - to find and extract reserves. Holding output steady is tough enough. Unless oil prices jump, Exxon may have peaked.

Apple and Exxon may not be so different, after all

February 5, 2013

The tech and oil giants share more than nearly identical U.S. market-leading values of about $400 bln. Both are threatened by shrinking margins and a struggle to replace their precious wares. Exxon has survived four times longer than Apple, but appears to be just as vulnerable.

Exxon Mobil running hard just to stand still

April 25, 2013

The world’s biggest company is pumping just 3 pct more oil than it was 12 years ago. Yet Q1 results show capital spending rising fast. Only buybacks are making earnings per share growth look decent. Justifying Exxon’s valuation premium to peers is getting harder.

Exxon has suffered too much for flawed XTO deal

July 29, 2010

Disgruntled investors have wiped more than $40 billion off the value of Exxon Mobil since its splurge on U.S. gas giant XTO Energy -- almost exactly the firm's price tag. With Congress ditching carbon emissions rules, clean-burning gas looks like a bad bet. Yet to assume that XTO has zero value seems wrongheaded.

Exxon’s carbon tax hedge is way out of the money

July 8, 2010

Exxon Mobil's $31 billion hedge is way out of the money. Gas prices have tumbled since the U.S. oil giant agreed to pay that amount for the gas producer XTO. That doesn't make the deal a bust. A carbon tax might make the XTO purchase look smart -- but Exxon benefits for as long as Congress twiddles its thumbs.

BP’s Gulf fiasco makes it vulnerable to a takeover

May 27, 2010

Eventually, BP will definitively stop the flow of oil from its deepwater mishap in the Gulf of Mexico. That's when the autopsy will begin in earnest. But if the information dribbling into the public domain proves correct, the British energy giant will be a weakened creature -- so weak it will be vulnerable to a takeover.