On track to deliver ~$14 billion of further
earnings and cash flow growth potential over the next four
years
- Expecting capital investments to generate average returns of
~30%, with payback periods less than 10 years for greater than 90%
of the capex2
- Pursuing more than $20 billion in lower emissions
opportunities, up $3 billion
- Generated $9 billion in structural cost savings with $6 billion
more expected by 2027
- Increasing pace of share repurchases to $20 billion per year
from the Pioneer close through 2025, assuming reasonable market
conditions
ExxonMobil today gave an update to its Corporate Plan through
2027, reflecting continued execution of its strategy to provide the
products society needs and to
lower emissions, both its own and others’.
Since 2019, solid execution of ExxonMobil’s strategy has
increased the earnings power of the corporation, adding about $10
billion to its annual earnings and cash flow at a real Brent price
of $60 per barrel. These improvements provide a strong foundation
to further grow annual earnings and cash flow by $14 billion from
year-end 2023 through 2027, as the company continues to reduce
structural costs and improve the mix of its business by growing
production from low-cost-of-supply, advantaged assets and
increasing sales of high-value performance chemicals,
lower-emission fuels, and performance lubricants.
“By any measure, our plans have and will continue to deliver
exceptional value,” said Darren Woods, chairman and chief executive
officer. “We remain committed to providing the energy and products
that raise living standards around the world while building a new
business to reduce emissions in hard-to-decarbonize parts of the
economy. ExxonMobil is uniquely equipped to do both, and we’re
confident that both present significant opportunities for
profitable growth.”
The company also announced it intends to deliver $6 billion in
additional structural cost reductions by year-end 2027, bringing
the total structural cost savings to approximately $15 billion
versus 2019. Opportunities from consolidating value chains and
centralizing key activities including maintenance, supply chain,
procurement, order to cash, financial reporting, planning and
analysis, and trading will enable further efficiency and execution
effectiveness.
Upstream earnings potential is on track to more than double by
2027 versus 2019, resulting from investments in high-return,
low-cost-of-supply projects. Over the next five years,
approximately 90% of the company’s planned Upstream capital
investments in new oil and flowing gas production are expected to
generate returns greater than 10% at a Brent price of $35/bbl. The
company has made good progress executing its plan to reduce
Upstream operated greenhouse gas emissions intensity by 40% to 50%
by 2030, compared with 2016 levels, having already achieved
approximately half of this planned reduction.3
The company expects oil and gas production in 2024 to be about
3.8 million oil-equivalent barrels per day, rising to about 4.2
million oil-equivalent barrels per day by 2027, driven by growth in
the Permian and Guyana.
Product Solutions is leveraging scale and technology advantages
to nearly triple earnings potential by 2027 vs. 2019. Earnings
growth is being delivered through structural cost reductions,
strategic project execution that will double sales of high-value
products, and other earnings improvements such as higher
reliability, more efficient maintenance, facility optimization
projects, and commercial improvements including trading. The
portfolio value is being continuously upgraded through divestments
of non-strategic assets and continued investment in advantaged
sites to increase high-value products such as the recent chemical
expansion in Baytown.
The Company’s capital allocation approach prioritizes
competitively advantaged, high-return, low-cost-of-supply,
value-accretive investments that enable ExxonMobil to lead the
industry now and through the energy transition. The company now
anticipates total annual capital expenditures and exploration
expense of $23 billion to $25 billion in 2024 and $22 billion to
$27 billion annually from 2025 through 2027, generating an average
return of approximately 30%.2 Greater than 90% of the capex has
payback periods less than 10 years.2 The increase in capex
beginning in 2025 is driven by the growth in value-accretive Low
Carbon Solutions opportunities to reduce emissions.
Increased cash flow and earnings enable further surplus cash
generation and increased shareholder distributions. The company
remains on track to complete $17.5 billion in share repurchases in
2023 as part of the $35 billion repurchase program previously
announced for 2023 and 2024. After the Pioneer merger closes, the
go-forward pace of the program in 2024 will be increased to $20
billion annually through 2025, assuming reasonable market
conditions.
Low Carbon Solutions: Building a new value-accretive
business
ExxonMobil is pursuing more than $20 billion of lower-emissions
opportunities through 2027, which represents the third increase in
the last three years, from an initial $3 billion in projects
identified in early 2021. This is in addition to the company’s
recent $5 billion all-stock acquisition of Denbury, which expanded
carbon capture and storage opportunities through access to the
largest CO2 pipeline network in the United States.
The company is pursuing a portfolio of opportunities in lithium,
hydrogen, biofuels, and carbon capture and storage that in
aggregate is expected to generate returns of approximately 15% and
could reduce third-party emissions by more than 50 Mta by 20304,5.
These lower emissions solutions help address climate change and
closely align with ExxonMobil’s competitive advantages and core
capabilities. Approximately 50% of the planned investments support
building the company’s Low Carbon Solutions business, which reduces
customers’ greenhouse gas emissions.
“We continue to see more opportunities to harness our
technology, scale, and capabilities to implement real solutions to
lower emissions and to profitably grow our Low Carbon Solutions
business,” added Woods. “Success in accelerating emission
reductions requires the development of nascent markets. We need
technology-neutral durable policy support, transparent carbon
pricing and accounting, and ultimately, customer commitments to
support increased investment. We’re actively advocating for each of
these areas so we can grow a profitable, and ultimately large, low
carbon business.”
ExxonMobil is developing a leading position in lithium, fully
leveraging its upstream skills, such as geoscience, reservoir
management, and efficient drilling. It also taps the company’s
downstream capabilities in fluid processing and extraction to
separate the lithium from the brine. These skills and experiences
underpin the company’s cost advantaged entry into the lithium
business at scale, with strong returns and a lower environmental
impact. Work has begun for the company’s first phase of lithium
production in southwest Arkansas, an area known to have large,
highly concentrated lithium deposits. First production is expected
in 2027. The company is evaluating further growth opportunities in
lithium globally. By 2030, ExxonMobil aims to produce enough
lithium to supply the manufacturing needs of approximately 1
million EVs per year.6
The company recognizes the significant uncertainty in how the
energy transition and its low carbon business will develop and
expects to pace emissions-reduction investments, effectively
allocating resources as markets, customer commitments, and policy
evolve. This minimizes the downside risks while establishing an
advantaged position to capture and maximize the upside
potential.
The balance of the company’s low carbon capital will be used to
reduce its own emissions in support of its 2030 emission reduction
plans and its 2050 Scope 1 and 2 net-zero ambition. In the Permian
Basin, the company is on track to reach net-zero emissions for
unconventional operations by 2030, and previously announced it also
expects to leverage its Permian greenhouse gas reductions plans to
accelerate Pioneer’s net-zero ambition by 15 years, to 2035 from
2050.
Supporting materials for this press release are available on the
Investor Relations page of ExxonMobil.com.
______________________
1 Adjusted net income sourced from
Bloomberg; for ExxonMobil, Bloomberg’s adjusted net income is
earnings ex. identified items for the applicable period. Figures
for 2019 to 2022 are actuals sourced from Bloomberg. Consensus
estimates for 2023 to 2027 are sourced from Bloomberg as of October
2, 2023.
2 Calculations are based on ExxonMobil
plan. Calculations exclude capex for Corp & Fin, Operated by
Others projects, exploration, LTO/maintenance/sustaining programs,
and incubating projects and spend to reduce own emissions not
supported by policy.
3 Emission reduction plans announced in
December 2021 include a 20- to 30-percent reduction in
corporate-wide greenhouse gas intensity by 2030 compared to 2016
levels. This will be supported by a 40- to 50-percent reduction in
upstream greenhouse gas intensity, a 70- to 80-percent reduction in
corporate-wide methane intensity, and a 60- to 70-percent reduction
in corporate-wide flaring intensity compared to 2016. Plans cover
Scope 1 and Scope 2 emissions for assets operated by the
company.
4 Lower-emission investment portfolio
delivers ~15% return on a capital-weighted basis under current and
potential future government policies based on ExxonMobil
projections. Calculations exclude capex for incubating projects and
spend to reduce own emissions not supported by policy.
5 We see the opportunity to help other
essential industries and customers achieve their goals to lower
emissions. Estimates of GHG emissions are on a life cycle basis and
include avoided and abated emissions from hydrogen, lower-emission
fuels, and carbon capture and storage. For example, customers could
avoid up to 25 Mta of their GHG emissions if all of ExxonMobil’s
projected 2030 supply to the market of lower-emission fuels
displaces conventional fuel refined from crude oil. Calculation is
an ExxonMobil analysis illustrating the general benefits of
lower-emission fuels based on estimated fuel CI from various
third-party sources (such as Argonne National Labs’ GREET model) as
compared against its conventional fuel alternate on a life cycle
basis. Calculation is an estimate that represents a range of
potential outcomes that are based on certain assumptions. Estimates
are based on the potential implementation of projects or
opportunities that are at various stages of maturity. Individual
projects or opportunities may advance to a final investment
decision by the company based on a number of factors, including
availability of supportive policy and permitting, technology and
infrastructure for cost-effective abatement, and alignment with our
partners and other stakeholders. Actual avoided and abated
emissions abatement may differ.
6 Based on ExxonMobil internal
analysis.
About ExxonMobil
ExxonMobil, one of the largest publicly traded international
energy and petrochemical companies, creates solutions that improve
quality of life and meet society’s evolving needs.
The corporation’s primary businesses - Upstream, Product
Solutions and Low Carbon Solutions – provide products that enable
modern life, including energy, chemicals, lubricants, and lower
emissions technologies. ExxonMobil holds an industry-leading
portfolio of resources, and is one of the largest integrated fuels,
lubricants, and chemical companies in the world. In 2021,
ExxonMobil announced Scope 1 and 2 greenhouse gas
emission-reduction plans for 2030 for operated assets, compared to
2016 levels. The plans are to achieve a 20-30% reduction in
corporate-wide greenhouse gas intensity; a 40-50% reduction in
greenhouse gas intensity of upstream operations; a 70-80% reduction
in corporate-wide methane intensity; and a 60-70% reduction in
corporate-wide flaring intensity.
With advancements in technology and the support of clear and
consistent government policies, ExxonMobil aims to achieve net-zero
Scope 1 and 2 greenhouse gas emissions from its operated assets by
2050. To learn more, visit exxonmobil.com and ExxonMobil’s
Advancing Climate Solutions.
Follow us on LinkedIn, Instagram and X.
Important Information about the Transaction and Where to Find
It
In connection with the proposed transaction between Exxon Mobil
Corporation (“ExxonMobil”) and Pioneer Natural Resources Company
(“Pioneer”), ExxonMobil and Pioneer will file relevant materials
with the Securities and Exchange Commission (the “SEC”), including
a registration statement on Form S-4 filed by ExxonMobil that will
include a proxy statement of Pioneer that also constitutes a
prospectus of ExxonMobil. A definitive proxy statement/prospectus
will be mailed to stockholders of Pioneer. This communication is
not a substitute for the registration statement, proxy statement or
prospectus or any other document that ExxonMobil or Pioneer (as
applicable) may file with the SEC in connection with the proposed
transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION,
INVESTORS AND SECURITY HOLDERS OF EXXONMOBIL AND PIONEER ARE URGED
TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS
AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE
DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the
registration statement and the proxy statement/prospectus (when
they become available), as well as other filings containing
important information about ExxonMobil or Pioneer, without charge
at the SEC’s Internet website (http://www.sec.gov). Copies of the
documents filed with the SEC by ExxonMobil will be available free
of charge on ExxonMobil’s internet website at www.exxonmobil.com
under the tab “investors” and then under the tab “SEC Filings” or
by contacting ExxonMobil’s Investor Relations Department at
investor.relations@exxonmobil.com. Copies of the documents filed
with the SEC by Pioneer will be available free of charge on
Pioneer’s internet website at
https://investors.pxd.com/investors/financials/sec-filings/. The
information included on, or accessible through, ExxonMobil’s or
Pioneer’s website is not incorporated by reference into this
communication.
Participants in the Solicitation
ExxonMobil, Pioneer, their respective directors and certain of
their respective executive officers may be deemed to be
participants in the solicitation of proxies in respect of the
proposed transaction. Information about the directors and executive
officers of Pioneer is set forth in its proxy statement for its
2023 annual meeting of stockholders, which was filed with the SEC
on April 13, 2023, in its Form 10-K for the year ended December 31,
2022, which was filed with the SEC on February 23, 2023, in its
Form 8-K filed on May 30, 2023, in its Form 8-K filed on April 26,
2023 and in its Form 8-K filed on February 13, 2023. Information
about the directors and executive officers of ExxonMobil is set
forth in its proxy statement for its 2023 annual meeting of
stockholders, which was filed with the SEC on April 13, 2023, in
its Form 10-K for the year ended December 31, 2022, which was filed
with the SEC on February 22, 2023, in its Form 8-K filed on June 6,
2023 and in its Form 8-K filed on February 24, 2023. Additional
information regarding the participants in the proxy solicitations
and a description of their direct or indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials filed with the
SEC when they become available.
No Offer or Solicitation
This communication is for informational purposes and is not
intended to, and shall not, constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any offer, solicitation or
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the U.S.
Securities Act of 1933, as amended.
Cautionary Statement
Statements of future events, conditions, expectations, plans or
ambitions in this release or the subsequent discussion period are
forward-looking statements. Similarly, discussions of future carbon
capture, transportation, and storage, as well as biofuels,
hydrogen, and other plans to reduce emissions of ExxonMobil, its
affiliates, or companies it is seeking to acquire, are dependent on
future market factors, such as continued technological progress,
policy support and timely rule-making and permitting, and represent
forward-looking statements. Actual future results, including
financial and operating performance; potential earnings, cash flow,
and rates of return; total capital expenditures and mix, including
allocations of capital to low carbon investments; realization and
maintenance of structural cost reductions and efficiency gains,
including the ability to offset inflationary pressures; ambitions
to reach Scope 1 and Scope 2 net zero from operated assets by 2050,
to reach Scope 1 and 2 net zero in Upstream Permian Basin
unconventional operated assets by 2030 and Pioneer Permian assets
by 2035, to eliminate routine flaring in-line with World Bank Zero
Routine Flaring, to reach near-zero methane emissions from operated
assets and other methane initiatives, to meet ExxonMobil’s emission
reduction plans and goals, divestment and start-up plans, and
associated project plans as well as technology advances, including
in the timing and outcome of projects to capture and store CO2,
produce hydrogen, produce biofuels, product lithium, and use
plastic waste as feedstock for advanced recycling; maintenance and
turnaround activity; drilling and improvement programs; price and
margin recovery; shareholder distributions; planned Pioneer or
Denbury integration benefits; resource recoveries and production
rates; and product sales levels and mix could differ materially due
to a number of factors. These include global or regional changes in
oil, gas, petrochemicals, or feedstock prices, differentials, or
other market or economic conditions affecting the oil, gas, and
petrochemical industries and the demand for our products;
government policies supporting lower carbon investment
opportunities such as the U.S. Inflation Reduction Act or policies
limiting the attractiveness of investments such as European taxes
on energy and unequal support for different methods of carbon
capture; policy and consumer support for emission-reduction
products and technology; variable impacts of trading activities;
the outcome of competitive bidding and project wins; regulatory
actions targeting public companies in the oil and gas industry;
changes in local, national, or international laws, regulations, and
policies affecting our business including with respect to the
environment; taxes, trade sanctions, and actions taken in response
to pandemic concerns; the ability to realize efficiencies within
and across our business lines and to maintain current cost
reductions as efficiencies without impairing our competitive
positioning; the outcome and timing of exploration and development
projects; decisions to invest in future reserves; reservoir
performance, including variability in unconventional projects; the
level and outcome of exploration projects and decisions to invest
in future resources; timely completion of construction projects;
war, civil unrest, attacks against the company or industry, and
other political or security disturbances; expropriations, seizures,
and capacity, insurance or shipping limitations by foreign
governments or international embargoes; changes in consumer
preferences; opportunities for and regulatory approval of
investments or divestments that may arise such as the Pioneer
acquisition; the outcome of our or competitors’ research efforts
and the ability to bring new technology to commercial scale on a
cost-competitive basis; the development and competitiveness of
alternative energy and emission reduction technologies; unforeseen
technical or operating difficulties including the need for
unplanned maintenance; and other factors discussed here and in Item
1A. Risk Factors of our Annual Report on Form 10-K and under the
heading “Factors Affecting Future Results” available through the
Resources tab on the Investors page of our website at
exxonmobil.com. All forward-looking statements are based on
management’s knowledge and reasonable expectations at the time of
this release and we assume no duty to update these statements as of
any future date. Neither future distribution of this material nor
the continued availability of this material in archive form on our
website should be deemed to constitute an update or re-affirmation
of these figures as of any future date. Any future update of these
figures will be provided only through a public disclosure
indicating that fact.
Forward-looking statements contained in this release regarding
the potential for future earnings, cash flow, shareholder
distributions, returns, structural cost reductions, capital and
exploration expenditures, and volumes, including statements
regarding future earnings potential and returns in the Upstream and
Product Solutions segments and in our lower-carbon investments, are
not forecasts of actual future results. These figures are provided
to help quantify for illustrative purposes management’s view of the
potential future results and goals of currently-contemplated
management plans and objectives over the time periods shown,
calculated on a basis consistent with our internal modeling
assumptions. For all price point comparisons, unless otherwise
indicated, we assume $60/bbl Brent crude prices and $3/mmbtu Henry
Hub gas prices. Unless otherwise specified, crude prices are Brent
prices. These are used for clear comparison purposes and are not
necessarily representative of management’s internal price
assumptions. All crude and natural gas prices for future years are
adjusted for inflation from 2022. Energy, Chemical, and Specialty
Product margins reflect annual historical averages for the 10-year
period from 2010—2019 unless otherwise stated. Lower-emission
returns are calculated based on current and potential future
government policies based on ExxonMobil projections. These
assumptions are not forecasts of actual future market conditions.
Capital investment guidance in lower-emissions investments is based
on plan, however actual investment levels will be subject to the
availability of the opportunity set and focused on returns.
ExxonMobil reported emissions, including reductions and
avoidance performance data, are based on a combination of measured
and estimated data. Calculations are based on industry standards
and best practices, including guidance from the American Petroleum
Institute (API) and Ipieca. Emissions reported are estimates only,
and performance data depends on variations in processes and
operations, the availability of sufficient data, the quality of
those data and methodology used for measurement and estimation.
Emissions data is subject to change as methods, data quality, and
technology improvements occur, and changes to performance data may
be updated. Emissions reductions and avoidance estimates for
non-ExxonMobil operated facilities are included in the equity data
and similarly may be updated as changes in the performance data are
reported. ExxonMobil’s plans to reduce emissions are good faith
efforts based on current relevant data and methodology, which could
be changed or refined. ExxonMobil works to continuously improve its
approach to identifying, measuring, and addressing emissions.
ExxonMobil actively engages with industry, including API and
Ipieca, to improve emission factors and methodologies, including
measurements and estimates.
The term “Upstream planned capital investments” as used in this
release refers to projects that bring on new volumes with returns
calculated on a money-forward basis. The term “flowing gas” as used
in this release refers to gas available for sale that is not
marketed as liquefied natural gas. The terms “performance
chemicals” and “performance lubricants” as used in this release
refers to products that provide differentiated performance for
multiple applications through enhanced properties versus commodity
alternatives and bring significant additional value to customers
and end-users. The term “lower-emission fuels” as used in this
release refers to fuels with lower life-cycle emissions than
conventional transportation fuels for gasoline, diesel, and jet
transport. The term “value-accretive” as used in this release
includes investments in new and developing markets that are
expected to generate returns based on support for these markets in
the Inflation Reduction Act and similar policies, subject to
permitting and regulatory approval of projects. The term “project”
as used in this release can refer to a variety of different
activities and does not necessarily have the same meaning as in any
government payment transparency reports.
“Structural cost savings” and related terms describe decreases
in cash operating expenses excluding energy and production taxes as
a result of operational efficiencies, workforce reductions and
other cost-saving measures that are expected to be sustainable
compared to 2019 levels. Estimates of cumulative annual structural
savings may be revised depending on whether cost reductions
realized in prior periods are determined to be sustainable compared
to 2019 levels.
This release summarizes highlights from ExxonMobil’s December 6,
2023 update for its corporate plans. For more information
concerning the forward-looking statements, defined terms, and other
information contained in this release, please refer to the complete
presentation (including important information contained in the
Cautionary Statement and Supplemental Information sections of the
presentation) on the Investors section of our website at
exxonmobil.com. Definitions and additional information concerning
certain terms used in this release are also provided in the
Frequently Used Terms available on the Investor page of our website
at www.exxonmobil.com under the heading Resources.
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