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ExxonMobil, SABIC Ink Deal to Forge Ahead with U.S. Project

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ExxonMobil Corporation’s (XOM - Free Report) affiliates and SABIC recently inked an agreement to carry out a comprehensive study of the planned Gulf Coast Growth Ventures project in Texas. The companies are also likely to start planning for front-end engineering and design work.

ExxonMobil and SABIC had chosen a site in San Patricio County, TX, for the proposed petrochemical complex in Apr 2017. The facility was to include an ethane steam cracker with a producing capacity of 1.8 million tons of ethylene per year, a monoethylene glycol unit and two polyethylene units.

The project is one of the 11 key chemical, refining, lubricant and liquefied natural gas projects in ExxonMobil’s $20 billion “Growing the Gulf” initiative in the United States. We note that the initiative has been made possible by the abundance of low-cost U.S. natural gas.

These projects of ExxonMobil – both on completion and when operational at mature levels – are projected to have extensive and long-term benefits. All projects, planned or on going, are estimated to generate over 35,000 construction jobs and above 12,000 full-time jobs.

ExxonMobil and SABIC have collaborated in the past too. The companies’ successful alliances in Saudi Arabia comprise the Al-Jubail Petrochemical Company and Saudi Yanbu Petrochemical Company. The most recent construction of the companies include the world-scale specialty elastomers facilities at the Al-Jubail joint venture complex that is aimed to meet the growing demand for rubber-based industrial and automotive products.

This agreement reinforces ExxonMobil’s focus on progressing with the Gulf Coast Growth Ventures project.

ExxonMobil’s price chart, however, is unimpressive. Shares of the company have gained 0.2% in the last three months, while the Oil & Gas – International Integrated industry registered an increase of 1.5%.



ExxonMobil currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space include SunCoke Energy, Inc. (SXC - Free Report) , Exterran Corp. and Canadian Natural Resources Limited Ltd. (CNQ - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SunCoke Energy posted a positive earnings surprise of 120.0% in the preceding quarter. The company beat estimates in two of the four trailing quarters with an average negative surprise of 35.78%.

Exterran posted a positive earnings surprise of 123.21% in the year-ago quarter.

Canadian Natural Resources posted a positive earnings surprise of 30.77% in the preceding quarter. It surpassed estimates in two of the four trailing quarters with an average negative surprise of 275.46%.

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