Exxon Mobil (NYSE:XOM) saw its shares drop Wednesday. The oil giant expressed optimism its earnings would more than double through 2027 relative to 2019 as the company moves forward with a slew of cost-cutting measures.
Exxon said it’s on track to grow its earnings and cash flow by $14 billion over the next four years, as the company slashes costs, grows production, and increases sales of chemicals, lower emission fuels and performance lubricants.
The oil giant plans to cut structural costs by another $6 billion through the end of 2027, delivering $15 billion in total savings compared with 2019.
The announcement comes nearly two months after Exxon agreed to buy Pioneer Natural Resources for nearly $60 billion, or $235 a share. This is Exxon’s largest deal since it bought Mobil during the late 1990s. Pioneer is the largest producer in the Midland Basin, a section of the Permian.
After the merger closes — which is expected to do so in the first half of 2024 — the oil giant plans to increase its annual share repurchase program to $20 billion in 2024 through 2025, up from $17.5 billion in 2023.
Exxon anticipates capital expenditures in the range of $23 billion to $25 billion in 2024, and $22 billion to $27 billion annually from 2025 through 2027. Those expenditures should generate average returns of 30%, with more than 90% of the spending having payback periods of less than a decade, according to the company.
XOM shares sank $1.50, or 1.5%, to $98.94.
