Exxon Mobil (NYSE:XOM) on Wednesday outlined a corporate spending plan that it said will double earnings and cash flow by 2027 from 2019′s levels, while also reducing emissions. The plan comes as the oil giant reevaluates its long-term strategy following the pandemic, and after a shake-up in its boardroom.
The company plans to spend between $20 billion and $25 billion per year through 2027. This is higher than the $16 billion to $19 billion range the company outlined for 2021 spending, but significantly below the $30 billion to $35 billion the company forecast spending annually before the pandemic took hold.
The company said the plan allows for "flexibility to adjust to adverse market conditions."
U.S. oil briefly tumbled into negative territory in April 2020 as the pandemic sapped demand for petroleum products, which forced energy companies like Exxon to rapidly cut costs. Investors are now prioritizing companies that are focused on leaner operations and returning capital, rather than those that are solely focused on growth.
In October, Exxon announced its first dividend hike in more than two years, and also announced plans to begin a share repurchase program of up to $10 billion over the next 12 to 24 months.
Looking forward, the company said it’s focused on high-quality assets. Exxon said that more than 90% of its new upstream investments will return more than 10% even if oil trades at $35 per barrel or below.
On Tuesday, U.S. oil stood at $69.16 per barrel. Prices have been volatile recently — WTI’s fallen rapidly after breaking above $85 in October — underlining uncertainty over the long-term trajectory for oil prices.
XOM shares took on 91 cents, or 1.5%, to $60.75.
