CA - Exxon Mobil: We Are Only Looking

2024-04-27 03:29:14 ET

Summary

• Exxon Mobil management is not interested in acquiring Hess. But management is likely very interested in acquiring the Hess Guyana interest.
• Exxon Mobil focuses on finding projects with competitive advantages to reduce corporate breakeven costs.
• CEO and Chairman Darren Woods emphasizes raising the bar when cost cutting goals are achieved. This attitude likely permeates other areas of the business.
• Similarly, management emphasizes low cost by getting more from comparable assets than the competition.
• The Guyana and Suriname areas could be as much as one-third of company production by the end of the decade.

Exxon Mobil ( XOM ) management has stated that they are not interested in Hess ( HES ). Even though that statement gives me visions of a bridge in the desert that someone wants to sell, it is actually quite possible. The main area of contention is Guyana. That is actually by far the lowest cost producing asset that Hess possesses and is likely a major reason for the Chevron ( CVX ) acquisition for Hess followed by the Exxon Mobil request for arbitration. Shareholders may find out in the process what some very capable industry insiders believe that Guyana is worth....

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