Exxon will increase production by 2030 more than expected. Shares jumped

Exxon Mobil, the largest US oil producer, has updated its strategic plan to 2030: it now expects earnings growth by that date to be $5 billion more than it previously estimated, and oil and gas production to increase by 5.5 million barrels a day - also an improvement in its outlook. Exxon is betting on its traditional high-yield assets in Guyana and the Permian Basin while scaling back its low-carbon initiatives. The oil producer's shares rose more than 2% in trading on December 9.

Exxon Mobil forecasts an increase in production to 5.5 million barrels of oil equivalent per day by 2030. Earlier it expected that this figure would reach 5.4 million barrels, notes Reuters. A significant contribution should come from the Permian Basin, the largest oil field in the United States. Here Exxon intends to increase production to 2.5 million barrels per day against the previously planned 2.3 million, the company said in a statement.

It said it is using AI to optimize drilling trajectories, which helps reduce costs throughout the production cycle. Production costs in the Perm Basin are expected to be $30 per barrel, $5 lower than previous estimates.

Exxon has raised its cost-cutting target by $2 billion - the company now plans to achieve $20 billion in savings by 2030 relative to 2019. Cost optimization touched low-carbon initiatives, on which it was previously planned to spend about $30 billion, recalls the Financial Times. In addition, the company suspended construction of a $7 billion hydrogen plant in Texas, citing weak demand from customers.

The new forecast assumes that Exxon expects to increase profits by 2030 not by $20 billion, as previously expected, but by $25 billion. As a starting point, the company points to 2024, when this figure amounted to $33.7 billion. Thus, we are talking about growth by 75%. At the same time, the target level of capital expenditures remained the same - $27-28 billion next year and then from $28 billion to $33 billion annually until the end of the decade.

"The updated strategic plan reinforces our leadership. By 2030, we expect earnings growth of $25 billion and cash flow growth of $35 billion over 2024 - at comparable prices and margins. All of this without increasing capital expenditures and with a return on invested capital above 17%," Exxon Mobil Chairman and CEO Darren Woods said in a press release.

The company estimates that upstream profits will grow by more than $14 bln by the end of the decade compared to 2024. This estimate is also $5 bln higher than the previous one.

Exxon explained that the new strategy reflects efforts to reduce costs and improve margins even in the face of volatile oil prices. In late October, the company reported that its net profit in the third quarter declined due to cheaper oil - by 12%. At the same time, the level of production turned out to be a record: after years of trying to stop the decline, Exxon is now actively increasing production of fossil fuels, Bloomberg wrote in October.

Exxon's updated plan is likely to be taken positively by the market, according to TPH Energy Research analyst Jeffrey Lambujona, whose opinion is quoted by Reuters.

In trading on December 9, Exxon Mobil shares rose by 3.2%, after which they slowed down. remaining in the plus by 2.5%. Since the beginning of 2025, the company's market value has added just over 10%.

15 analysts of Wall Street, advise securities of the largest U.S. oil producer to buy, 16 - adhere to a neutral view and recommend to keep them in the portfolio, follows from the data of MarketWatch. "Bearish" ratings the company has no. The average target price is $128.2, suggesting a potential upside of 10.5% relative to the closing level of trading on December 8.

This article was AI-translated and verified by a human editor