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ExxonMobil (XOM) Joins UN-led Methane Reporting Initiative

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Exxon Mobil Corporation (XOM - Free Report) has opted to participate in the United Nations’ prominent methane emissions reporting initiative, per a report by the Financial Times.

The decision underscores the company’s dedication to promoting transparency and signifies a shift from its prior position of opposing external monitoring of its climate change strategies.

Advancements in technology have enabled Enbridge to participate in the Oil and Gas Methane Partnership (“OGMP”). The partnership follows a standardized reporting framework designed to monitor industry emissions of the potent greenhouse gas, and it is led by the UN Environment Program.

Certain countries, including the United States, are taking steps to enforce penalties for methane emissions. The Inflation Reduction Act in the United States is set to introduce a fee of $900 per ton of methane emitted in 2024, escalating to $1,500 per ton in 2026.

The US Environmental Protection Agency is set to finalize a regulation this week, requiring companies to address emissions. The OGMP, created in 2014 for methane emission management, was upgraded in 2020 to OGMP 2.0, offering a more ambitious reporting framework.

The majority of key Western oil companies are participants in the partnership. To demonstrate their commitment to addressing methane concerns, the oil and gas players are required to disclose comprehensive annual data on total emissions and emission intensity. They are expected to establish interim and long-term targets, and develop plans to reduce non-emergency flaring and venting.

ExxonMobil implemented a range of technologies, including sensors and optical gas imaging cameras, to oversee its oil and gas operations. The technologies are designed to detect not only large-scale methane releases but also smaller leaks emanating from equipment within the operations.

ExxonMobil’s decision to join OGMP signifies a change in the company’s position on emissions reporting. This move represents a departure from its previous resistance, reflecting its commitment to responding to shareholder demands for greater transparency and enhanced climate targets.

Zacks Rank & Stocks to Consider

ExxonMobil currently carries a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Murphy Oil Corporation (MUR - Free Report) possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies and independent E&P group.

The company has a long history of increasing the value of its shareholders, courtesy of steady cash flows. Its board of directors approved a 10% increase in the quarterly dividend rate beginning in the first quarter of 2023, taking the total annualized figure to $1.10 per share. The company's current dividend yield is 2.57%, better than the Zacks S&P 500 composite's average of 1.7%.

Suncor Energy, Inc. (SU - Free Report) is Canada’s premier integrated energy company. Suncor boasts an impressive supply-chain network, owning significant oil sands and conventional production platforms.

Suncor's robust liquidity position will allow it to sustain its dividend even if oil prices stay lower for longer. Notably, the company recently hiked its dividend by 5% to 54.5 Canadian cents per share (over the prior quarter) and increased the buyback authorization to roughly 10% of its public float.

Liberty Energy (LBRT - Free Report) reported third-quarter 2023 earnings of 85 cents per share, which beat the Zacks Consensus Estimate of earnings of 74 cents. The Denver, CO-based oil and gas equipment company’s outperformance reflects the impacts of strong execution and increased service pricing.

Liberty’s board of directors announced a cash dividend of seven cents per common share, payable Dec 20, 2023, to stockholders of record as of Dec 6, 2023. This dividend reflects a 40% rise from the previous quarter’s level. As part of its shareholder return policy, LBRT repurchased shares worth $29 million at an average price of $16.38 per share.

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