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XOM's Upstream Advantage: The Growth Story Investors Shouldn't Ignore
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Key Takeaways
XOM witnesses record 1.7 million oil-equivalent barrels per day and rising Guyana output.
New Midland acreage from Sinochem supports XOM's push into advantageous, low-cost assets.
XOM shares have gained 2% over the year while trading at a higher EV/EBITDA than the industry.
Exxon Mobil Corporation (XOM - Free Report) is among the largest integrated energy companies, but generates the majority of its earnings from upstream operations. The energy giant has a strong presence in the Permian, the most prolific oil and gas resource in the United States, and offshore Guyana. Thus, XOM’s upstream business outlook seems bright.
On the third-quarter earnings call, ExxonMobil stated that it has generated another record production of 1.7 million oil-equivalent barrels per day. Following its strategic push on broadening its presence in advantageous assets, XOM also mentioned its acquisition of more than 80,000 premium acres in the Midland, a sub-basin of the broader Permian, from Sinochem Petroleum.
ExxonMobil also highlighted that it has achieved record production of more than 700,000 barrels per day from Guyana. Notably, ongoing operations in advantageous assets like Permian and Guyana seem profitable since breakeven costs are low. Therefore, XOM can manage the business environment even when oil prices fall.
FANG & COP Also Have Footprint in the Permian
Diamondback Energy Inc. (FANG - Free Report) and ConocoPhillips (COP - Free Report) also have a strong presence in the Permian. FANG is a Permian pure-play player with sufficient drilling inventory to sustain its production for more than 10 years.
ConocoPhillips’ assets in the Lower 48 comprise resources in the prolific Delaware and Midland basins. The Delaware Basin contributes considerably to COP’s Lower 48 production. Thus, both FANG and COP can sail through low oil prices.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 2% over the past year compared with the 6.8% improvement of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.53X. This is above the broader industry average of 4.82X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for XOM’s 2025 earnings has seen no revisions over the past seven days.
Image: Bigstock
XOM's Upstream Advantage: The Growth Story Investors Shouldn't Ignore
Key Takeaways
Exxon Mobil Corporation (XOM - Free Report) is among the largest integrated energy companies, but generates the majority of its earnings from upstream operations. The energy giant has a strong presence in the Permian, the most prolific oil and gas resource in the United States, and offshore Guyana. Thus, XOM’s upstream business outlook seems bright.
On the third-quarter earnings call, ExxonMobil stated that it has generated another record production of 1.7 million oil-equivalent barrels per day. Following its strategic push on broadening its presence in advantageous assets, XOM also mentioned its acquisition of more than 80,000 premium acres in the Midland, a sub-basin of the broader Permian, from Sinochem Petroleum.
ExxonMobil also highlighted that it has achieved record production of more than 700,000 barrels per day from Guyana. Notably, ongoing operations in advantageous assets like Permian and Guyana seem profitable since breakeven costs are low. Therefore, XOM can manage the business environment even when oil prices fall.
FANG & COP Also Have Footprint in the Permian
Diamondback Energy Inc. (FANG - Free Report) and ConocoPhillips (COP - Free Report) also have a strong presence in the Permian. FANG is a Permian pure-play player with sufficient drilling inventory to sustain its production for more than 10 years.
ConocoPhillips’ assets in the Lower 48 comprise resources in the prolific Delaware and Midland basins. The Delaware Basin contributes considerably to COP’s Lower 48 production. Thus, both FANG and COP can sail through low oil prices.
XOM’s Price Performance, Valuation & Estimates
Shares of XOM have gained 2% over the past year compared with the 6.8% improvement of the composite stocks belonging to the industry.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 7.53X. This is above the broader industry average of 4.82X.
The Zacks Consensus Estimate for XOM’s 2025 earnings has seen no revisions over the past seven days.
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.