LongHaul Posted November 19, 2013 Share Posted November 19, 2013 How has Exxon outperformed competitors for so long? Exxon fascinates me. It is a low cost producer in Upstream, downstream and chemicals. I think it has generally maintained this position for over a century starting with Rockefeller's Standard Oil. Munger even mentioned it at the Berkshire meeting in May of this year as an example of a large company that was able to stay on top - which is the exception. Anyone have any insights into how Exxon has been run vs. competitors? Link to comment Share on other sites More sharing options...
bmichaud Posted November 19, 2013 Share Posted November 19, 2013 Great write-up by Deutsche Bank on the history of XOMXOM_DB_Note_9.3.13.pdf Link to comment Share on other sites More sharing options...
Guest longinvestor Posted November 19, 2013 Share Posted November 19, 2013 Great write-up by Deutsche Bank on the history of XOM The write-up mentions "engineer lead" organization which it exactly is. I have known from my brother and b-In-law who both work for Exxon as engineers that this defines Exxon. No CFO, don't hire MBA's (they make managers). Extremely conservative, in terms of the audit regime in place, mentioned in the report. Good report Link to comment Share on other sites More sharing options...
no_free_lunch Posted November 19, 2013 Share Posted November 19, 2013 Brooklyn investor just put out a piece on XOM. Your research might already be at a level beyond this but probably worth a read. http://brooklyninvestor.blogspot.ca/2013/11/exxon-mobil-xom.html Link to comment Share on other sites More sharing options...
Guest hellsten Posted November 20, 2013 Share Posted November 20, 2013 Brooklyn investor just put out a piece on XOM. Your research might already be at a level beyond this but probably worth a read. http://brooklyninvestor.blogspot.ca/2013/11/exxon-mobil-xom.html Short-seller Chanos says oil majors increasingly look like 'value traps': http://www.reuters.com/article/2013/11/19/us-investment-summit-chanos-idUSBRE9AI0QC20131119 The more I learn about Chanos the less I like him. Link to comment Share on other sites More sharing options...
giofranchi Posted November 20, 2013 Share Posted November 20, 2013 How has Exxon outperformed competitors for so long? My answer is always the same… SUPERIOR CAPITAL ALLOCATION I know, I am extremely boring… ;) Gio Link to comment Share on other sites More sharing options...
LongHaul Posted November 20, 2013 Author Share Posted November 20, 2013 From the little I know of Exxon here are some observations of Exxon's Focus: 1. IRR with a high hurdle rate. 2. Being the low cost producer. (technology, efficiency) 3. Under Lee Raymond they were contrarian - bot Mobil in 99, invest thru the cycle. 4. Don't waste money on Green initiatives, advertising as much as others. 5. Grade employees - end up with really good employees. 6. True Long term focus. Link to comment Share on other sites More sharing options...
rogermunibond Posted November 20, 2013 Share Posted November 20, 2013 The DB note and Chanos have essentially the same point w/r//t replacing reserves. That is XOM is too big to grow organically and when you rely on acquisitions you may lose your low cost producer advantage. XTO acquisition for example looks to be quite expensive in a $3-4 mcf environment. Probably this changes when LNG takeaway capacity improves in 2018-2020. Link to comment Share on other sites More sharing options...
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