报告名称：ExxonMobil(XOM UN)How to Survive the Oil Apocalypse
报告类型：海外市场
报告日期：2016-03-02
研究机构：德意志银行股份
页数：10
简介：This Too Shall Pass
One of the overwhelming takeaways of the XOM Analyst Meeting is that, nomatter the environment, very little changes. Spending remains relativelyconstrained while costs normalize/commodity recovers, short-cycle spend willprovide near/medium-term flexibility, but otherwise, the relatively unchangedbusiness model is a reminder that XOM remains the standard of "through thecycle" management. However, with a slow recovery in FCF, limited relativeleverage to a recovery at this point in the cycle, and trading at a 60% premiumto peers, we see greater upside elsewhere. Hold.
Step One: The Path Towards Cash Neutrality…and eventual FCF
Near-term focus remains on capital discipline (US onshore activity reduced tolease retention and de-lineation efforts) and spending within cash flow whilepreserving optionality on the M&A front or on increasing onshore activitysubsequent to a sustainable recovery in crude. A roll-off in chemical spend isexpected to see 2017 capital spend of ~$22Bn (w/ upstream flat) while the2018-2020 time frame targets spend of ~$24-$25Bn (a 20% reduction to 2015).We estimate $6.5Bn in asset sales needed over the next two years to maintaincash flow neutrality on the revised budget (roughly in-line with 2014-2015 totalspend) and a break-even of $45+/bbl by 2017.
Normalization of cost structure and returns? Not yet
One of the outstanding questions facing XOM (and other super majors)remains the sustainability and attractiveness of the business model in a low tomoderate crude price environment (i.e. Can the combination of cost reductionsand capital reallocation support sustainable reserve replacement, dividend/FCFgrowth and improving returns?). If the budget outlook is any indication, we’renot there yet. Rather than pushing countercyclical spend as in the past, majorproject spend and project FIDs remain on indefinite hold, as costs still need toadjust further (offshore rigs have caught up, but contractor backlogs havelimited deflation) and conviction on timing of crude recovery is limited. XOMsees line of sight towards an improvement in capital efficiency of 20-30%.
Production reduced, onshore gaining share, but don’t hold your breath on M&A
Given lower capex, the production outlook was reduced from 4.3 MMboe/d in2017 to 4.0-4.2 MMboe/d through 2020, although liquids mix should continueto increase. With medium-term spend favoring US unconventional, XOMprovided long-term potential production of 600-1,000 Mboe/d (vs. current 220Mboe/d), or ~40% of post-2018 development opportunity, and 6 Bn boe of netresource. Although we continue to expect activity at some point, CEOTillerson’s tone on M&A was noticeably less constructive than a year ago, withaggressive expectations and continued value destruction of US E&Ps (debtincrease and equity issuance) challenging value prospects.

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