XOM - Exxon

[Cevian]

Exxon's recent removable from the Dow may have created a buying opportunity as ETFs are forced to sell the stock.

 

Grabbed some at $39 today and looking to acquire more over the next few days.

[influx]

Exxon's recent removable from the Dow may have created a buying opportunity as ETFs are forced to sell the stock.

 

Grabbed some at $39 today and looking to acquire more over the next few days.

 

Are you after the income or ? Why would you not buy PSXP?

[Dalal.Holdings]

https://www.reuters.com/article/us-phillips-66-results/phillips-66-partners-could-cut-capex-dividends-if-dapl-pipeline-shuts-idUSKCN24W31I

[fareastwarriors]

 

Exxon downsizes global empire as Wall Street worries about dividend

 

https://www.reuters.com/article/us-exxon-mobil-spending-exclusive/exclusive-exxon-downsizes-global-empire-as-wall-street-worries-about-dividend-idUSKBN25Z0H7

[RadMan24]

The riding debt and declining ROE and ROIC do not offer much hope for Exxon from an investor point of view.

 

It's almost better to look at the Canadian E&Ps like Suncor, though its not an easy choice.

 

Whose to say Chevron doesn't eclipse Exxon in market cap ? Who would have thought that would even been possible a year or so ago

[Mark Jr.]

It's almost better to look at the Canadian E&Ps like Suncor, though its not an easy choice.

 

 

What about Canadian Natural Resources (CNQ) or Imperial Oil (IMP)? I've been meaning to look closer at those.

 

[EDIT] - Maybe I should have looked before I posted that reply. Very quick glance shows CNQ P/E now at 908 (was single digits earlier this year), so I'd have to look at what hit them and where, while IMP has double the P/E of Suncor for the same yield.

[SharperDingaan]

It's almost better to look at the Canadian E&Ps like Suncor, though its not an easy choice.

 

 

What about Canadian Natural Resources (CNQ) or Imperial Oil (IMP)? I've been meaning to look closer at those.

 

[EDIT] - Maybe I should have looked before I posted that reply. Very quick glance shows CNQ P/E now at 908 (was single digits earlier this year), so I'd have to look at what hit them and where, while IMP has double the P/E of Suncor for the same yield.

 

Know WHY you are using XOM as the yard-stick - is it as a substitute o/g ETF?

'Cause if you are going to invest in Canada, you need to decide what kinds of exposure (upstream, downstream, refining, etc) you want, in what proportions, and in what markets (large, mid, small cap, etc.). There are a great many very good choices, but if you're not familiar with Canadian o/g - consider a Canadian o/g ETF instead.

 

So what?

Almost all the major Albertan tar-sands producers have restored shut-in production during Q3, with minor impact on differentials - at some companies, > 20,000 boe/d - great!. At the same time that Newfoundland's off-shore production (anything White Rose related) is about to shut in (indefinitely?) if a federal (vs provincial) government bailout doesn't arrive shortly. Hence, if you have a longer time horizon, and can tolerate shorter term risk, Newfoundland actually has some of the better opportunities. 

 

SD

 

 

[Xerxes]

https://www.wsj.com/articles/exxon-used-to-be-americas-most-valuable-company-what-happened-oil-gas-11600037243?mod=searchresults&page=1&pos=1

 

"Exxon’s bets could pay off in the long term if oil and gas prices go up later this decade and rivals’ lack of investment leaves them unable to capitalize. The company disputed there is discord within its ranks over its direction."

 

bottom line, Exxon remains a contrarian name.

 

"To reverse Exxon’s fortunes, Mr. Woods returned to the company’s playbook: investing heavily in mega-projects during a period of low oil prices to catch the upswing. It has spent billions in Guyana and the Permian Basin."

 

On a different article, i dont recall where anymore, the author was linking Exxon's shrinking market cap (not the recent year due to Covid) due to massive buyback since 2000 that had shrunken the outstanding shares (i think IIRC) 40%. The takeaway is that if your buyback fail to improve the stock price over the long term (which is the result of a good buyback), all you are doing is shrinking the share count. A much lower share count times a flat price = a much smaller market value for the firm.

 

I think Exxon's buyback are not as bad same General Electric case where they actually overpaid for an opaque business they didnt have a good handle on (themselves) and burned all the cash. But still not-accretive.

But

[SharperDingaan]

The risk here is NOT using the opportunity.

When the tide comes in you don't have to be on the best boat - any boat that doesn't sink is good enough.

First class, or steerage, is just the quality of the experience!

 

SD

 

[CorpRaider]

Zero out the divvy and commit to only special dividends and/or buybacks going forward (but first we roll mfers UP).  What do you think?

[SharperDingaan]

My kind of scum!

 

SD

[Xerxes]

https://www.wsj.com/articles/exxon-chevron-ceos-discussed-merger-11612126203?mod=searchresults_pos1&page=1

 

Exxon, Chevron CEOs Discussed Merger

better be all-stock (ala Barricks+Rangold)

 

 

[Spekulatius]

https://www.wsj.com/articles/exxon-chevron-ceos-discussed-merger-11612126203?mod=searchresults_pos1&page=1

 

Exxon, Chevron CEOs Discussed Merger

better be all-stock (ala Barricks+Rangold)

 

LOL, new name of the combined entity: Standard Oil

[Xerxes]

That would be awesome i think. Standard Oil for the overall corporate entity, but if they like they can keep Chevron, Mobile and Exxon and Imperial Oil as separate brands on the downstream at the gas stations. This way the illusion is there these are not one company.

 

Much better that Chexxon.

 

The new stock ticker ought to be JDF :  John D  Rockerfeller

[DooDiligence]

I like Exron

[Xerxes]

 

'Nuff said. Usually second acts are good. You know 'empire strikes back' or 'Godfather II',

Holy s$it; Rex Tillerson was no good.

Poor Darren, got a bad hand.

Edited May 26, 2021 by Xerxes

[woodstove]

Thanks - interesting charts.  I've always thought of Exxon as a company with a good culture and superb engineering skills.  Maybe a bit dull in securities markets, but one of the stalwarts.  Perhaps can use a stabilizer against quarter-focused.

[Xerxes]

Not dull. In the 90s, it was a growth asset as it consumed Mobil, churning out high ROE numbers. Exxon was the Wall Street darling in 2008-09 as the rest of the economy plummeted. In the early 2010s, when first Apple market cap surpassed that of Exxon it made headlines. It was not dull then either, we just don't remember it anymore.

In my opinion, on a company specific case, Rex Tillerson can be blamed with his untimely purchase of XTO (a natural gas asset) right before the shale revolution. You can call that bad luck, but looking at his short tenure as the US Secretary of State under Trump, his record is not very good. Arguably he has been one of he worst US Secretary of State in history. One can argue that strong presidents tend to monopolize foreign policy and run it from the White House, leaving State Department doing paperwork (like Nixon-Kissinger), but it was not even that. He was just a bad manager, period.

Edited May 26, 2021 by Xerxes

[MVP444300]

Exxon loses board seats to activist hedge fund in landmark climate vote

 

https://www.reuters.com/article/exxon-mobil-agm/update-7-exxon-aims-to-beat-back-dissidents-at-shareholder-meeting-showdown-idUSL2N2ND0SH

 

Disclosure:  No position

[Gabriel]

The EBITDA of XOM is projected at about 43 to 48B this and the next few years with a net debt of about 60B.

Question:  I sold lots of 35$ naked put contracts (550) in March 2020 expiring Jan 2022 and Jan 2023 for respectively 7-10$ and 12$ and converted them at 1.4066 CAD/USD. 

I closed about half the position a few months ago. Those left (300 + 50 contracts) are now worth about 0.40$ (Jan 22) and 2.5$ (Jan 23).  I am not convinced paying 25K is worth it at this ridiculously low strike price. I am thinking i could roll them or just buy them and sell covered calls. Any thoughts welcome. Thank you. Gabriel

[Pelagic]

3 hours ago, Gabriel said:

The EBITDA of XOM is projected at about 43 to 48B this and the next few years with a net debt of about 60B.

Question:  I sold lots of 35$ naked put contracts (550) in March 2020 expiring Jan 2022 and Jan 2023 for respectively 7-10$ and 12$ and converted them at 1.4066 CAD/USD. 

I closed about half the position a few months ago. Those left (300 + 50 contracts) are now worth about 0.40$ (Jan 22) and 2.5$ (Jan 23).  I am not convinced paying 25K is worth it at this ridiculously low strike price. I am thinking i could roll them or just buy them and sell covered calls. Any thoughts welcome. Thank you. Gabriel

That's a lot of contracts. Are you working with a margin account or were these cash secured puts and you want to free up some liquidity for something else?

You've made what like ~95% of your profit on the 22s and around 80% on the 23s? Is the risk worth it for what's left in premium? The 23s today equate to a roughly 7% return until expiry so a year and half+ for 7%? There's probably a better use of cash I'd imagine.

Not sure what you mean by buy them and sell covered calls? You want to buy back the contracts then buy the underlying and sell covered calls on it to offset the price you paid buying back the puts? Doable, but then you open up the downside risk from today's price to the mid 20s range where you currently have exposure.

I don't have much of a view on XOM other than being generally bullish on oil gas for the near term, just looking at it as someone who's sold a fair bit of puts on other names.

[Gabriel]

Very appreciated.

Yes on margin, not cash secured, but blocking 2% only today of available margin.
I meant should XOM exceptionally fall to 35$, I would sell covered calls at the same strike price and collect the dividends to say that the “worse” outcome is not “so bad”.

The key decision metric you raise is the return and better use of this portion of the margin elsewhere, but the risk of being exercised increases in an expensive market. The better decision may possibly be to keep even this portion of the margin unused for other opportunities. Thank you fir a very clear answer. Gabriel 

[Gabriel]

Pelagic: I closed the XOM 300 Jan 2022 puts @ 35$ for 0.30$. I am keeping the naked puts for jan 2023 at 35$. Thanks.

I have now to decide on a BCE calendar spread. You are welcome to comment.

Long 300 calls Jan 2023 @ 50$ and short 300 calls June 11 @ 60$ for a net 9.27109 CAD debit per share. (Paid close to no time value for the long call on May 26). 

Ex-Dividend date is June 15. The short call will most likely be exercised and I will have to pay the dividend. So to optimize, I need to roll it further in time with sufficient time value (and avoid being exercised on the short call for the dividend), and instead exercise my Long call on June 10 to collect the 0.875 CAD dividend and reduce my cost price to 50 + 8.396$ + credit from rolling the 60$ call one or to weeks. How would you optimize this? I have the funds. Thank you. Gabriel

Edited June 1, 2021 by Gabriel

[Gregmal]

One day we are going to thank all these ESG retards for ultimately creating a massive energy crisis. Wouldnt be shocked to see $200 a barrel in the next half decade. As if massive inflation wasn't bad enough, they want to shut down all the drilling sites, pipelines, and pull funding for any sort of growth initiative. Guess who's going to bear the brunt of this?

[RadMan24]

22 hours ago, Gregmal said:

One day we are going to thank all these ESG retards for ultimately creating a massive energy crisis. Wouldnt be shocked to see $200 a barrel in the next half decade. As if massive inflation wasn't bad enough, they want to shut down all the drilling sites, pipelines, and pull funding for any sort of growth initiative. Guess who's going to bear the brunt of this?

ESG is apart of the "system". So, it'll be the same people who were disproportionally impacted by the covid-19 crisis. It's like being in the matrix, eventually a new program will replace it, but still remains apart of the "system". You had ESG funds and activists (majority action) pounding their chest to vote off Ken Frazier, one of the most prominent black corporate leaders, due to "climate change." Not only that, but these ESG folks rather the US get its oil from the Middle East, Iran, Venezuela, Russia, rather than from Canada, our friendly as can be neighbor. The death of pipelines from Canada is about as stupid, but not quite as stupid, as using corn as fuel. But I digress...