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Exxon Mobil - North American Portfolio Review
Exxon Mobil (NYSE:XOM) has spent the last few years building up a large portfolio of unconventional oil and gas plays in North America and plans to spend tens of billions over the next five years on the development of these assets. The company also has a deep inventory of domestic conventional properties that are in various stages of exploration or development. (For additional reading, check out A Guide To Investing In Oil Markets.)
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2012 Capital Plan
Exxon Mobil plans to spend approximately $37 billion per year from 2012 to 2016, for a total five-year spending program of $185 billion. This represents a significant increase over the previous five years when the company spent $143 billion.
Unconventional Resources
Exxon Mobil has doubled its unconventional resource base since 2005, with most of the growth coming from shale and tight oil and gas plays in North America. The company also has extensive holdings in the oil sands in Canada.
Exxon Mobil increased the company's unconventional oil and gas properties through the purchase of XTO Energy in 2010. The company also purchased two private oil and gas companies with substantial undeveloped acreage in the United States.
Exxon Mobil now has large positions in most major domestic shale plays, including the Woodford Shale, Fayetteville Shale, Eagle Ford Shale, Marcellus Shale and the Bakken play.
Kearl Development
One large oil sands project that the company has been working on is the Kearl Development, which is operated by Imperial Oil (NYSE:IMO) The first phase of the Kearl Development will have capacity of 110,000 barrels per day and is expected to start production in late 2012.
An expansion project at Kearl was approved in 2011. The project will add an additional 110,000 barrels per day of capacity at a cost of $8.9 billion. The company expects production from the expansion project to start in 2015.
Exxon Mobil has regulatory approval for up to 345,000 barrels per day of production from Kearl and will probably have another expansion planned for later in the decade.
Another company involved with the oil sands projects is Suncor Energy (NYSE:SU). The company has interests in various projects that are either producing or under development. Suncor Energy reported average daily production of 361,000 barrels per day its oil sands operations in February 2012.
Deepwater
Another project that is expected to start up production over the next few years is the Hadrian South project located in the deepwater Gulf of Mexico. Exxon Mobil will process its production from Hadrian South through the nearby Luius Project currently being developed by Anadarko Petroleum (NYSE:APC). Petrobras Brasileiro (NYSE:PBR) and Eni (NYSE:E) also have an interest in the Hadrian South project.
The Bottom Line
Exxon Mobil was a little late to realize the value of unconventional oil and gas plays in the onshore United States, but has now spent tens of billions to get a substantial amount of producing properties and undeveloped acreage. The company will develop these plays as well as a large inventory of conventional properties to generate growth over the next five years. (To know more about oil and gas, read Oil And Gas Industry Primer.)
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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.
2012 Capital Plan
Exxon Mobil plans to spend approximately $37 billion per year from 2012 to 2016, for a total five-year spending program of $185 billion. This represents a significant increase over the previous five years when the company spent $143 billion.
Unconventional Resources
Exxon Mobil has doubled its unconventional resource base since 2005, with most of the growth coming from shale and tight oil and gas plays in North America. The company also has extensive holdings in the oil sands in Canada.
Exxon Mobil increased the company's unconventional oil and gas properties through the purchase of XTO Energy in 2010. The company also purchased two private oil and gas companies with substantial undeveloped acreage in the United States.
Exxon Mobil now has large positions in most major domestic shale plays, including the Woodford Shale, Fayetteville Shale, Eagle Ford Shale, Marcellus Shale and the Bakken play.
Kearl Development
One large oil sands project that the company has been working on is the Kearl Development, which is operated by Imperial Oil (NYSE:IMO) The first phase of the Kearl Development will have capacity of 110,000 barrels per day and is expected to start production in late 2012.
Exxon Mobil has regulatory approval for up to 345,000 barrels per day of production from Kearl and will probably have another expansion planned for later in the decade.
Another company involved with the oil sands projects is Suncor Energy (NYSE:SU). The company has interests in various projects that are either producing or under development. Suncor Energy reported average daily production of 361,000 barrels per day its oil sands operations in February 2012.
Deepwater
Another project that is expected to start up production over the next few years is the Hadrian South project located in the deepwater Gulf of Mexico. Exxon Mobil will process its production from Hadrian South through the nearby Luius Project currently being developed by Anadarko Petroleum (NYSE:APC). Petrobras Brasileiro (NYSE:PBR) and Eni (NYSE:E) also have an interest in the Hadrian South project.
The Bottom Line
Exxon Mobil was a little late to realize the value of unconventional oil and gas plays in the onshore United States, but has now spent tens of billions to get a substantial amount of producing properties and undeveloped acreage. The company will develop these plays as well as a large inventory of conventional properties to generate growth over the next five years. (To know more about oil and gas, read Oil And Gas Industry Primer.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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