1 / 30

The Most Profitable Oil Company in the World

The Most Profitable Oil Company in the World. Or is it????. Who is ExxonMobil?. World’s largest publicly traded petroleum and natural gas company Industry leader in almost all aspects of energy and petrochemical business Involved in exploration, production, and transportation of its products:

armand-fowler
Download Presentation

The Most Profitable Oil Company in the World

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Most Profitable Oil Company in the World

  2. Or is it????

  3. Who is ExxonMobil? • World’s largest publicly traded petroleum and natural gas company • Industry leader in almost all aspects of energy and petrochemical business • Involved in exploration, production, and transportation of its products: • Crude Oil • Natural Gas • Petroleum • Operate on six continents under the brand names Exxon, Esso and Mobil

  4. What does ExxonMobil do? • Upstream • Exploration and Production • Holdings in 36 countries • Downstream • Manufacturing, transportation and distribution • 38 refineries in 21 countries • In 2007, refinery throughput averaged 5.6 million barrels per day, and petroleum product sales were 7.1 million barrels per day

  5. What does ExxonMobil do? • Chemical • Petrochemicals • More than 90 % of chemical capacity is employed in businesses where we ExxonMobil ranks first or second in worldwide market position. • Technology • Innovation • $3.5 billion spent over last 5 years on research • Focus on maximizing performance in remote areas/difficult operating environments

  6. Current Factors affecting the ExxonMobil and the Oil Industry • Volatility • Market uncertainty • Rising costs • Skill shortages

  7. Current Factors affecting ExxonMobil and the Oil Industry: • Volatility • Market uncertainty • Rising costs • Skill shortages

  8. Current Factors affecting ExxonMobil and the Oil Industry: • Biofuels • Energy allocation • Environmental issues • Global Energy Demand

  9. Current factors affecting ExxonMobil: Offshore drilling

  10. Current factors affecting ExxonMobil: Outrage associated with record profits

  11. Current factors affecting ExxonMobil: Windfall Profit Tax

  12. Current factors affecting ExxonMobil: Hugo Chavez I am going halt crude oil shipments to ExxonMobil refineries!

  13. Current factors affecting ExxonMobil: Exxon Valdez Case

  14. 2007 Financial Performance • Sales: $390.3 billion • 94.28% increase from 2002 • Gross Margin: 42.8% (Industry: 46.2%) • 55.5% in 2002 • Operating Margin: 17.42% (Industry: 5.1%) • 8.71% in 2002 • Net Profit: $40.6 billion • 254% increase since 2002

  15. FYE 2007 Financial Ratios • Dividend Yield: 1.60% • Industry Avg. of 1.60% • Price / Earnings: 12.73 • Industry Avg. of 13.5 • ROE: 33.35% • Industry Avg. of 28.7% • Beta*: .95

  16. Net Profit *From the 2007 ExxonMobil Annual Report

  17. Shareholder Return *From the 2007 ExxonMobil Annual Report

  18. Future Financial Health • Analysts expect the company to grow at a steady rate of 11% over the next five years • Hoovers, Goldman-Sachs, Merrill Lynch • The earnings are expected to grow at 8% • This will put the earnings per share over $9 a share in 2010

  19. Growth rate of earnings Assumptions: Growth rate of 8% Lower growth rate than in the past due to uncertanties in the market Production is down compared to past – there is some cash flow uncertainty since recent cash flows have been bolstered by commodities trading

  20. Analysis • This is a respectable growth • However, not the immense growth that the company has recently had • Future forces such as shareholder’s concern with the environment, political turmoil, and oil commodity pricing will effect Exxon • This combined with forecast of the company will support investing at ‘weight’

  21. Forecast • Relaxed prices • Decreased Domestic Demand (20%) • Increased Global Demand (80%) • Energy Information Association

  22. Washington • Windfall Profit Tax-Highly Unlikely • Conservative vs. Liberal • Off shore Drilling?

  23. Energy Cycle

  24. Cracking Towers

  25. Hold At Weight • Buy Vanguard VDE • Production Life Cycle • Cracking Spread • Market Weighted

  26. Top Holdings

  27. Exxon vs. Market • Diversified • Service Sector • Segmented

  28. Stock Re-Purchase • Stakeholder Theory • Board of Directors • Myopic Management? • Best Option? • EPS Management

More Related