Exxon Lifts 2030 Cash Flow Forecasts, Sees Less Low Carbon

(Bloomberg) -- Exxon Mobil Corp. raised its forecast for future earnings and cash flow due to growth in key assets in the Permian Basin, Guyana and liquefied natural gas — and reduced low carbon investments.

Exxon expects $35 billion in cash flow growth by 2030, an increase of about 17% from what it was projecting a year ago, with no changes to capital expenditure, the Spring, Texas-based company said today in a statement. It sees $20 billion of low-carbon investment over the next five years, down from $30 billion last year after Chief Executive Officer Darren Woods warned of lagging customer demand for green fuels such as hydrogen.

“We expect a slightly positive reaction to the updated outlook,” Arun Jayaram, an analyst at JPMorgan Chase & Co. said in a note. “Importantly, capex expectations were in line,” he said, noting next year’s production will be “a bit light” compared with forecasts. 

Heavy investment in low-cost assets in the Permian Basin and Guyana, both of which are profitable at less than $35 a barrel, are helping Exxon grow production and make money even as rivals struggle to adjust to crude prices that are hovering near the lowest in four years. CEO Darren Woods believes his fossil fuel investments over the past decade — even during the pandemic and wave of environmental, social and governance investing — has set the company up to thrive, whatever path the energy transition takes in the future. 

“Our transformation helps ensure that in any future environment, and for decades to come, Exxon Mobil will have an important role and deliver substantial shareholder value,” he said in the statement. 

Exxon expects to produce 5.5 million barrels of oil equivalent per day in 2030, 17% higher than current levels and 100,000 barrels a day more than its forecast a year ago. The increase is “underpinned by technology advancement” particularly in the Permian Basin, it said. Currently US producers only recover between 8% and 10% of the oil within shale rock due to its high density but Exxon believes it has a suite of proprietary technologies that can unlock more of this trapped crude. 

The company also plans to bring online a large natural gas export terminal, Golden Pass, in the coming weeks, allowing it to turn what was a Permian byproduct into a high-revenue fuel sold globally.

Exxon previously warned it would pause a plan to build the world’s largest low-carbon hydrogen plant in Texas that would have cost billions of dollars. It blamed slow customer demand for the delay, but the sector is also struggling after after Congress curtailed incentives as part of President Donald Trump’s tax and spending package.

“As expected, the company has slowed its pace in certain low carbon ventures given continued policy uncertainty,” RBC Capital Markets analyst Biraj Borkhataria said in a note. “We expect it to remain measured in its approach as it relates to this space.”

CEO Woods and other executives will host a presentation to analysts at 10:00 a.m. ET to discuss their plans for 2026 and beyond. All are based on constant real Brent price of $65 a barrel and average 2010-2019 refining and chemical margins. 

Targets for 2026 include: 

• Capital spending will be $27 billion to $29 billion
  • Production expected to be about 4.9 million barrels of oil equivalent per day
  • About 37% of this will come from the Permian
• Final investment decisions will be taken on:
  • Papua New Guinea LNG (6 million tons per annum)
  • Rovuma Phase 1 LNG in Mozambique (18 million tons per annum)
  • A low carbon data center project “late” in 2026
• All 2030 corporate emissions intensity plans to be achieved in 2026

Targets for 2030 include:

• Exxon expects to generate cumulative surplus cash flow of $145 billion through 2030
  • Costs savings will rise 10% to $20 billion compared with 2019 levels.
• Earnings will grow $25 billion by 2030, a compound annual growth rate of 13%
• Capital spending will increase to between $28 billion and $32 billion a year from 2027
  • The increase is mainly due to LNG growth

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