The asset sales at Exxon look to be continuing as the company continues its transformation from its worst year in history, 2020, into the free cash flow generating, deleveraged juggernaut it is quickly becoming thanks to oil in the triple digits and management’s strategic initiatives.
Today, the latest brick in the strategic initiative wall is that Exxon is reportedly considering selling its assets in North Dakota’s Bakken after buyers reportedly took interest, according to Reuters and Bloomberg.
The properties could be valued at up to $5 billion, the report says. The company is currently far along in the process, with the report noting that it is “in the final round of interviewing bankers to help launch the sale process”.
This move would go to compliment Exxon’s goal of $15 billion in asset sales that it set several years ago.
The company’s financial reshaping is starting to accelerate. Recall, last month we noted that Exxon was implementing a new $10 billion stock buyback after crushing its last quarter’s estimates. Exxon reported Q4 revenue of $84.97 billion, beating expectations of $76.67BN by more than $10 billion! It reported adjusted EPS of $2.05, above analysts forecast of $1.93 as operating profit in oil and gas production soared. In the same quarter a year ago, Exxon posted an adjusted profit of just three cents a share.
As Bloomberg said last month, in 2021, “Exxon garnered ample cash to repair its balance sheet, pay the S&P 500 Index’s third-largest dividend and pledge to restart share buybacks. It’s a remarkable financial turnaround for the oil giant a year after it incurred its first annual loss in at least 40 years during the darkest days of the pandemic.”
The company also announced in January it would be combining its chemical and refining units as part of a plan to cut costs and find new efficiencies.
Effective April 1, the company is going to be split into three segments: ExxonMobil Upstream Company, ExxonMobil Product Solutions and ExxonMobil Low Carbon Solutions. They will be supported by ExxonMobil Technology and Engineering, the report says.
Days prior to its HQ change announcement, we reported that the company said it planned on reaching its target for net zero emissions by 2050. The pledge applies to Scope 1 and Scope 2 greenhouse gas emissions, we wrote. The company said it had “identified more than 150 potential steps and modifications that can be applied to assets in its upstream, downstream and chemical operations.”
We’re guessing this corporate action is part of the “master plan”. Exxon Chief Executive Officer Darren Woods said earlier this month: “We are developing comprehensive roadmaps to reduce greenhouse gas emissions from our operated assets around the world.”
Exxon says it is “working with [its] partners to achieve similar emission-reduction results”.
In December, we noted that Exxon was on track to meet its 2025 emissions goals 4 years in advance. In Exxon’s full plan, which can be found on its website here, the company said it “plans to increase spending to $15 billion on greenhouse gas emission-reduction projects over the next six years while maintaining disciplined capital investments.”