Energy giants Exxon Mobil and Chevron provided investors a glimpse into 2023 and beyond this week, with Exxon Mobil announcing Thursday it will increase stock buybacks through 2024 while maintaining current capital spending levels. Exxon Mobil stock and Chevron stock advanced Thursday.
Exxon Mobil announced its five-year corporate plan Thursday, following Chevron's update Wednesday on its plans for 2023 capital spending. XOM reports that it plans to maintain its annual capital expenditures at $20 billion to $25 billion through 2027. However, the oil giant is also planning to increase its share buyback program to $50 billion through 2024. This is up from the previous $30 billion through 2023. XOM has a $15 billion buy back program in 2022.
President Joe Biden has criticized Exxon Mobil, Chevron and several other large producers throughout the year for choosing to focus on returning money to shareholders instead of upping production. The energy giants have enjoyed record quarterly profits in 2022 on the back of high prices for crude oil gasoline and diesel fuel.
"Our five-year plan is expected to drive leading business outcomes and is a continuation of the path that has delivered industry-leading results in 2022," CEO Darren Woods said in a statement Thursday.
Oil Prices Rebound; XOM Stock Erases Gain
Meanwhile crude oil prices rebounded in early trade Thursday from lows as energy stocks also generally rallied. U.S. crude oil prices traded as much as 4.8% higher, before paring gains, dropping 0.7% to around $71.50 per barrel Thursday, hitting new one-year lows. Brent crude prices shed gains and dipped 0.2% to below $77 after also hitting a 12-month low Wednesday. The early rebound came on news of a spill in the Keystone pipeline in Nebraska, and on optimism around the reopening of China's economy, the world's top crude importer.
Exxon Mobil stock gained 0.6% to 104.27 Thursday during market trading. Shares are trading back below their 10-week moving average, after erasing a 9% gain from an October breakout.
Chevron stock advanced 0.4% to 173.24. Chevron is finding support at its 50-day/10-week line and pulled back not quite 5% below a 182.50 buy point in a cup base.
Exxon Mobil Stock: The Five-Year Plan
Along with keeping its annual capital expenditures level through 2027, Exxon Mobil also plans to grow its carbon emissions-cutting investments to around $17 billion through the same period. This represents nearly a 15% increase from current levels.
Exxon's capital investments in 2023 will be in the range of $23 billion-$25 billion "to help increase (oil) supply to meet global demand," Exxon reported.
The company projects earnings and cash flow will double by 2027, compared to 2019. Full year earnings in 2019 were $2.25 per share. Cash flow from operations in 2019 came in at $29.7 billion.
Wall Street expects Exxon Mobil to report fourth-quarter earnings in late January. Analysts forecast EPS growing 67% to $3.43 while revenue is expected to advance 18% to $100.5 billion, according to FactSet.
Chevron Stock: CVX Capital Spending
Before Exxon Mobil released its latest business outlook, Chevron on Wednesday said it expects a $14 billion capital spending budget in 2023, a 25% increase overall for its subsidiaries, and $3 billion for its affiliates.
Similar to Exxon, Chevron is also planning to double its carbon cutting initiatives to $2 billion in 2023.
"We're maintaining capital discipline while investing to grow both traditional and new energy supplies," CEO Mike Wirth said in a statement. "Our capex budgets remain in line with prior guidance despite inflation."
Wall Street predicts full-year 2023 earnings to be $16.99 per share while revenue is predicted to come in at $220.3 billion.
Chevron also has a six-month license to pump crude in Venezuela.
In late November the White House eased oil sanctions on Venezuela. The Biden administration, following a human rights agreement signed between President Nicolaus Maduro's administration and opposition negotiators, said it would allow Chevron to resume oil production in the Latin American nation. Chevron can produce oil for six months and can only export it to the U.S. under the license agreement.
Reuters has reported Chevron is preparing to make its first shipment of Venezuelan crude to the U.S. by late December.
Analysts expect Chevron to report Q4 earnings toward the end of January. Wall Street predicts EPS growing 75% to $4.49. Analysts view sales increasing 17% to $56.2 billion.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
