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Exxon Mobil: $55 Brent is Fine; Open to M&A, Including Permian
Exxon Mobil: $55 Brent is Fine; Open to M&A, Including Permian

Yahoo

time18 hours ago

  • Business
  • Yahoo

Exxon Mobil: $55 Brent is Fine; Open to M&A, Including Permian

'Uncertainty' is the word for the oil market today and a single 24-hour snapshot of the price of WTI is an illustration, an Exxon Mobil senior vice president said. 'We've had perhaps the shortest oil spike in the history of the oil markets,' Jack Williams said at a J.P. Morgan energy conference June 24. 'It started on a Sunday evening; ended by Monday morning.' The WTI-August contract on CME Group closed June 20 for the weekend at $74, up from about $68 a week earlier before Israel launched daily attacks on Iranian targets. The U.S. joined in on June 21, dropping bunker-buster bombs onto underground Iranian nuclear infrastructure. The contract resumed trading at 4 p.m. CDT June 22, opening at $78/bbl. The following afternoon on June 23, after Israel and Iran agreed to a cease-fire, the contract fell to $64/bbl, which was the price on June 11. Williams said, 'So I mean, I think it's really hard to predict near term where things are going to go. We have a lot of volatility out there.' Exxon can weather sub-$70 WTI, though, he said. 'We think we're well positioned and ready in that kind of environment." And, of course, if prices improve 'we'll benefit pretty hugely with the production we have going on.' The $470-billion market cap, international and integrated energy major's five-year plan is based on mid-cycle prices of about $65 Brent. Still, at $55 Brent, 'we generate $110 billion of surplus cash after dividends and capex,' Williams said. 'So we certainly can withstand lower pricing and that would be for an extended period of time over that entire period [into 2030].' Exxon Mobil's net debt to capital is 7%. 'So sitting very, very good there.' Some $24 billion of divestments 'got us really down to our fighting weight. So we're in really good shape.' If Exxon varied from its five-year plan, 'it would be because we see a really, really good attractive opportunity in front of us—not because we need to because of market conditions kind of forcing, kind of tying our hands. 'We're, of course, keeping our head up and looking around for opportunities and we'll take advantage of those as they present themselves.' The operator bought Permian Basin pureplay Pioneer Natural Resources in May 2024 for $64.5 billion in stock and debt assumption, picking up 721,000 boe/d, 53% oil. Post-closing results have been surprising—to the upside—Williams said. 'What we didn't factor in enough is the quality of the Pioneer workforce, work processes, what they were doing and the reverse synergies we're going to get from that. 'So we certainly had a pleasant surprise there with the quality of what Pioneer brought to the corporation.' Exxon has increased its estimate of Permian Basin operational savings from the Pioneer deal from $2 billion a year to $3 billion due to synergies. 'I would say that's looking really good, really positive,' Williams said. Meanwhile, though, digesting the Pioneer acquisition hasn't 'boxed us in at all in terms of having too much of the organizational firepower working on that.' Exxon is 'pretty wide open in terms of the ability to do … more acquisitions,' he added. It's looking for deals that are 'one plus one equals three. We're looking for value. We have to be able to add significant value.' Within the Permian Basin, there are small deals to be done too. 'With the Pioneer acreage and our legacy [Permian] acreage, we have a lot of areas where we can do some trades around the edges so we can do real win-wins or some bolt-on acquisitions around the edges … that we bring a lot of value.' Sign in to access your portfolio

Oil tanker rates collapse as conflict in Middle East abates
Oil tanker rates collapse as conflict in Middle East abates

Al Arabiya

time2 days ago

  • Business
  • Al Arabiya

Oil tanker rates collapse as conflict in Middle East abates

The cost of shipping Middle East crude to customers in Asia collapsed on Thursday, the latest sign of oil markets returning to normal after conflict eased in the world's top petroleum-exporting region. Charter rates slumped by 17 percent to 55.50 industry-standard Worldscale points, according to data from the Baltic Exchange in London. It works out at roughly $1.60 a barrel. 'Risk premiums have naturally faded,' said Fredrik Dybwad, an analyst at Fearnley Securities AS. 'There is ample vessel availability, and considering normal seasonality, rates should naturally find a lower level.' Shipping prices soared two weeks ago amid concern Iran might disrupt maritime traffic around Hormuz Strait, a vital waterway through which 20 percent of the world's oil and liquefied natural gas must pass. After almost two weeks of fighting between Iran and Israel that began on June 13, there's since been a ceasefire, hitting oil prices and lowering the risks for ships that enter the region. The Joint Maritime Information Center, a naval liaison with commercial shipping in the region, said Thursday that no hostilities had been reported in the Strait of Hormuz over the past 48 hours and that traffic had returned to normal levels. 'A sustained period of inactivity and strengthening of the ceasefire agreement will stabilize maritime tension in the Arabian Gulf,' it said in a note. 'Now that the market has become sanguine about Iran shutting the Strait of Hormuz, ships are running fluidly again, the premium gas been removed, and rates are correcting lower meaningfully,' said Jonathan Chappell, senior managing director at Evercore ISI. The Worldscale system is designed to let owners and charterers quickly calculate the latest earnings and per-barrel costs on thousands of trade routes. Vessels on the industry's benchmark Saudi Arabia-to-China route are earning $35,281 a day, according to the Baltic Exchange. They were making almost $76,000 on Monday.

Coterra Holds Rig Count Steady in the Permian as Market Jitters Ease
Coterra Holds Rig Count Steady in the Permian as Market Jitters Ease

Yahoo

time2 days ago

  • Business
  • Yahoo

Coterra Holds Rig Count Steady in the Permian as Market Jitters Ease

Coterra Energy Inc. CTRA is keeping its rig count steady at nine in the Permian Basin, a sharp pivot from the earlier plan to scale back operations amid oil market uncertainty. The shift signals renewed confidence of the company, which recently updated its stance on capital spending and production plans at an energy conference held in New York. In May, Coterra decided to cut its rig count to seven by the second half of 2025, trimming capital expenditures in the Permian by $150 million. The move was a precautionary step, caused by fears of a potential collapse in oil prices triggered by weak demand signals, high inventories and unpredictability surrounding OPEC+ supply cuts. The company earlier predicted a possible collapse of the oil market due to price headwinds, but it is now confident, given a change in macroeconomic activities. Coterra now expects to reverse its earlier decision of cutting down rig count and maintain it at nine rigs. The decision will push its capital spending to the high end of the updated $2-$2.3 billion annual range. At the energy conference, Coterra announced that it is in a good position to stay profitable even in leaner price environments. The company stated that it can deliver solid returns even with West Texas Intermediate ('WTI') crude priced between $60 and $65 per barrel, and still be profitable with a dip to $50. Importantly, only a few of Coterra's rigs are locked into long-term contracts, giving it room to scale back quickly if needed. This optionality provides a cushion against market swings while keeping upside potential intact. The decision to maintain the rig count rather than cut it highlights Coterra's cautious optimism in a still-fragile market. As sentiment around oil prices stabilizes, producers like Coterra are recalibrating for resilience rather than retreat. Houston, TX-based Coterra is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids. Currently, CTRA has a Zacks Rank #3 (Hold). Investors interested in the energy sector might look at some better-ranked stocks like BKV Corporation BKV, Subsea 7 S.A. SUBCY and Oceaneering International, Inc. OII. While BKV and Subsea 7 currently sport a Zacks Rank #1 (Strong Buy) each, Oceaneering carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. BKV Corporation is an energy company that produces natural gas from its owned and operated upstream businesses. The Zacks Consensus Estimate for BKV's 2025 earnings indicates 338.18% year-over-year growth. Subsea 7 operates as an engineering, construction and services contractor to the offshore energy industry worldwide. The Zacks Consensus Estimate for SUBCY's 2025 earnings indicates 95.52% year-over-year growth. Houston, TX-based Oceaneering is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII's 2025 earnings indicates 57.02% year-over-year growth. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Oceaneering International, Inc. (OII) : Free Stock Analysis Report Subsea 7 SA (SUBCY) : Free Stock Analysis Report Coterra Energy Inc. (CTRA) : Free Stock Analysis Report BKV Corporation (BKV) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research

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