ExxonMobil to prioritize capital investments on high-value assets

• Capital and exploration investments of $16-$19 billion in 2021; $20 billion to $25 billion annually to 2025
• Near-term investment priorities: Guyana, Permian, Brazil, Chemicals performance products
• Certain dry gas assets removed from development plan; after-tax impairment of $17 billion to $20 billion
• Commitment to cost reduction, reliable dividend remains unchanged

“Recent exploration success and reductions in development costs of strategic investments have further enhanced the value of our industry-leading investment portfolio,” said Darren Woods, chairman and chief executive officer for Exxon Mobil Corporation.  “Continued emphasis on high-grading the asset base – through exploration, divestment and prioritization of advantaged development opportunities – will improve earnings power and cash generation, and rebuild balance sheet capacity to manage future commodity price cycles while working to maintain a reliable dividend.”

The company said its annual business plan focused on the following priorities and actions:

• Leveraging the significant cost savings realized in 2020 that are on track to exceed announced reductions of $10 billion or 30 percent of capital spending and 15 percent of cash operating expenses. Key to ongoing expense management are business line reorganizations and efficiencies that include global workforce reduction of 15 percent by year-end 2021.
• Continued pacing of investments. The company expects $16 billion to $19 billion in capital and exploration expenditures in 2021, and $20 billion to $25 billion annually through 2025.
• Preserving the long-term value of the company’s investment portfolio by offsetting costs associated with project delays. The company plans to double earnings by 2027, when viewed on the same price and margin assumptions used in the 2020 Investor Day materials.
• Removal of less strategic assets from its development plan as a result of the growing strength of its portfolio. Assets removed include certain dry gas resources in the Appalachian and Rocky Mountains, Oklahoma, Texas, Louisiana and Arkansas in the United States, and in western Canada and Argentina. The decision will result in a non-cash, after-tax fourth quarter impairment charge of approximately $17 billion to $20 billion.
• Increased focus on monetization of less strategic assets to grow the portfolio of potential divestments, including certain North American dry gas assets, contingent on buyer valuations.

Woods said the business environment in the fourth quarter is showing signs of improvement despite the resurgence in COVID-19 cases and accompanying economic restrictions.

“Prices and margins for many of our businesses have improved from the third quarter and when coupled with continuing efforts to reduce spending and capture additional efficiencies, quarter-to-date cash flow has improved versus our plan assumptions,” he said.