Exxon Mobil Corporation · NYSE:XOM
Exxon Mobil — Investor Day (March 2015)
66 slides from Exxon Mobil's investor day presentation, Mar 10, 2015
Slide 1: 2015 Analyst Meeting
2015 Analyst Meeting New York Stock Exchange March 4, 2015
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements Outlooks, projections, estimates, targets, business plans, and other statements of future events or conditions in this presentation or the subsequent discussion period are forward-looking statements. Actual future results, including financial and opera
Slide 3: Agenda
Agenda 9am Welcome Jeff Woodbury, Vice President, Investor Relations and Secretary Key Messages and 2014 Results . Rex Tillerson, Chairman and CEO Energy Outlook Creating Value Through the Cycle Strategic Overview Differentiated Performance Forward Plans Unlocking Upstream Resource Value Strengtheni
Slide 4: Key Messages and 2014 Results
Key Messages and 2014 Results
Slide 5: Key Messages
Key Messages Continued focus on fundamentals in a lower price environment Selectively investing in attractive opportunities: 2014 Capex $38.5B; 2015 Capex $34B Growing higher-margin production: 4.0 MOEBD in 2014; 4.3 MOEBD in 2017 Delivering differentiated performance versus competition Industry-lea
Slide 6: Business Environment
Business Environment Continued emphasis on fundamentals throughout the cycle Brent Investments based on long-term view $/Barrel 150 Opportunities tested across variety of economic factors and broad range of prices 100 Relentless focus on things we control Project execution Lowering cost structure Ma
Slide 7: 2014 Results
2014 Results Results demonstrate strength of integrated model Best-ever safety performance Rigorous environmental management Strong financial / operating results Earnings $32.5B ROCE 16.2% Cash flow from operations and asset sales $49.2B Disciplined Capex $38.5B Unmatched distributions* shareholder
Slide 8: Risk Management
Risk Management Risk management is at the core of our business Operations Integrity Management System (OIMS) Systematic, managed approach Rigorously applied systems and processes Clearly defined policies, standards, and practices Ensure accountability Measure performance Recognize progress Continuou
Slide 9: Safety Performance
Safety Performance Committed to safe operations Workforce Lost-Time Incident Rate Employee and Contractor Incidents per 200K hours 0.2 Continued emphasis on personnel and process safety Petroleum Industry* Focused on prevention of higher 0.1 consequence events ExxonMobil Committed to our vision of ‘
Slide 10: Environmental Management
Environmental Management Protect Tomorrow. Today. Committed to minimizing environmental impact Systematically identify, assess, manage, and monitor risks Focus on reducing emissions, releases, and consumption
Slide 11: Energy Outlook
Energy Outlook sr nA! 6: wee see
Slide 12: Energy Outlook: Growth Led by Developing Economies
Energy Outlook Growth Led by Developing Economies Global energy demand expected to grow about 35% by 2040 Energy Demand Quadrillion BTUs 750 1.0% Average Growth/Year 2040 2010 to 2040 2010 1.7% 250 -0.1% Total Non-OECD OECD Source: ExxonMobil 2015 Outlook for Energy. Non-OECD nations drive growth in
Slide 13: Energy Demand to 2040
Energy Outlook Energy Demand to 2040 Oil and natural gas expected to meet about 60% of global energy demand in 2040 Global Energy Demand Quadrillion BTUs 250 0.8% 2040 Average Growth/Year 200 1.6% 2010 to 2040 150 0.1% 100 1.0% 2.3% 7.7% Other Solar & Oil Gas Coal Nuclear Renewable* Wind Oil and nat
Slide 14: Energy Outlook: Key Perspectives
Energy Outloo Key Perspectives Outlook guides our business strategy and investment plans Affordable energy solutions remain essential to advance global prosperity Diverse energy supplies are required to meet demand growth Technology advancements minimize environmental footprint and expand energy opt
Slide 15: Creating Value Through the Cycle: Strategic Overview
Creating Value Through the Cycle Strategic Overview
Slide 16: ExxonMobil Strategy
Creating Value Through the Cycle: Strategic Overview ExxonMobil Strategy Provide industry leadership to meet the world’s energy needs Risk Management World-Class Operational Workforce Excellence GROWING Technology Investment & Leadership SHAREHOLDER Cost Discipline VALUE Integration Project Executio
Slide 17: Business Integration
Creating Value Through the Cycle: Strategic Overview Business Integration Delivers industry-leading returns through the business cycle Full value chain knowledge and insights lead to resilient investments and operations Diverse asset base provides optionality Capture upside as it shifts along the va
Slide 18: Molecule Management
Creating Value Through the Cycle: Strategic Overview Molecule Management Capturing the highest value for every molecule Integrated market view enables more effective response to changes in the business environment 75% of refining operations integrated with chemical and lubes manufacturing Value chai
Slide 19: North America Integration
Creating Value Through the Cycle: Strategic Overview North America Integration Demonstrating benefits of the integrated model Investments positioned to optimize Upstream and Downstream returns Flexibility to process advantaged feedstocks Logistics commitments expand access to crude and product marke
Slide 20: Differentiated Performance
Creating Value Through the Cycle Differentiated Performance
Slide 21: 2014 Highlights
Creating Value Through the Cycle: Differentiated Performance 2014 Highlights Delivering on commitments FY14 Return on Capital Employed (%) 16.2 Industry-leading ROCE Free Cash Flow ($B) 17.9 Free Cash Flow up $7.3B vs. 2013 CAPEX ($B) 38.5 Capex $1.3B below plan Upstream Production (MOEBD) 4.0 Achie
Slide 22: Return on Capital Employed
Creating Value Through the Cycle: Differentiated Performance Return on Capital Employed Proven business model continues to deliver ROCE leadership Return on Average Capital Employed* Percent 25 2014 ROCE of 16.2% in 2014 ‘10 – ‘14, average 20 Strength of integrated portfolio, project 15 management,
Slide 23: Upstream Earnings per Barrel
Creating Value Through the Cycle: Differentiated Performance Upstream Earnings per Barrel Increased profitability reflects structural improvements Earnings per Barrel* $/OEB Improving production mix Highgrading portfolio 20 XOM Capturing cost savings CVX 15 RDS Securing enhanced fiscals TOT Discipli
Slide 24: Free Cash Flow
Creating Value Through the Cycle: Differentiated Performance Free Cash Flow Strong business performance and disciplined capital allocation Free Cash Flow* $B 30 2014 $17.9B free cash flow, up $7.3B from 2013 ‘10 – ‘14, average 25 Invest in attractive business opportunities Pay reliable and growing d
Slide 25: Shareholder Distributions
Creating Value Through the Cycle: Differentiated Performance Shareholder Distributions Industry-leading shareholder distributions through the business cycle Total Cash Distribution Yield* Percent 10 2014 2.7% dividend yield; 2.7% buyback yield in 2014 ‘10 – ‘14, average 8 6 Dividends per share up 55
Slide 26: Unparalleled Financial Flexibility
Creating Value Through the Cycle: Differentiated Performance Unparalleled Financial Flexibility Capacity to execute business strategy through the cycle Total Capitalization, Leverage, and Credit Rating* $B Unmatched access to capital on the most 500 attractive terms 400 AAA Substantial flexibility t
Slide 27: Forward Plans
Creating Value Through the Cycle Forward Plans
Slide 28: Investment Plan
Creating Value Through the Cycle: Forward Plans Investment Plan Selectively investing in attractive opportunities Capex by Business Line 2014 Capex of $38.5B $B Acquisitions Chemical 50 Downstream Expect to spend $34B in 2015 Upstream 40 Reduced Upstream spending Attractive Downstream and Chemical 3
Slide 29: Upstream Production Outlook
Creating Value Through the Cycle: Forward Plans Upstream Production Outlook On track to deliver 4.3 MOEBD in 2017 Total Net Production Outlook* MOEBD Accretive new volumes more than offset decline 4.5 U.S. Onshore Liquids Growth 4.3 4.0 16 projects online, adding more than Executing Projects 550 KOE
Slide 30: Upstream Production Outlook: Volume and Profitability Mix
Creating Value Through the Cycle: Forward Plans Upstream Production Outlook Improving volume and profitability mix Total Net Production Outlook* Total production outlook MOEBD 2015: up 2% 2.6 2016 – 2017: up 3% per year Liquids 2.4 Liquids outlook 2015: up 7% 2.2 – 2017: up per year 2016 4% 2.0 Gas
Slide 31: Creating Value Through the Cycle Summary
Creating Value Through the Cycle Strategy and business performance grow long-term shareholder value Delivering on commitments Differentiated performance Selectively investing through the business cycle Leveraging integration benefits Unparalleled financial flexibility
Slide 32: Unlocking Upstream Resource Value
Unlocking Upstream Resource Value
Slide 33: Upstream Business
Unlocking Upstream Resource Value Upstream Business Consistent approach over the long term to deliver industry-leading results Resource Base BOEB Add high-quality resources 90 develop 92 BOEB resource Selectively base 60 Deploy world-class project execution capabilities and operational excellence Ma
Slide 34: New Opportunity Growth
Unlocking Upstream Resource Value New Opportunity Growth Strategically pursuing diverse set of high-quality resource opportunities Laptev Sea Kara Sea Beaufort Chukchi Sea United Kingdom Norway Summit Creek Horn River West Siberia Athabasca Netherlands Montney Duvernay CanadaEast Coast Germany Bakke
Slide 35: Capturing High-Quality Resources
Unlocking Upstream Resource Value New Opportunity Growth Capturing high-quality resources Norway United Russia Kingdom Captured 17 new opportunities Romania Canada U.S. Onshore East Coast Kurdistan Region of Iraq Gulf of Mexico Guyana Drilled 13 discoveries Nigeria Côte d’Ivoire Colombia Brazil Equa
Slide 36: New Opportunity Growth
Unlocking Upstream Resource Value New Opportunity Growth Pursuing resources accretive to portfolio returns and profitability
Slide 37: Extensive Project Portfolio
Unlocking Upstream Resource Value Extensive Project Portfolio Portfolio of 120 projects supports investment selectivity Point Thomson IPS Mackenzie Gas Project Aasgard Subsea Compression Alaska Syncrude Projects Western Canada Kearl Firebag Expansion Odoptu Stage 2 SAGD Aspen Sahkalin-1 Hebron Kasha
Slide 38: Highgrading the Portfolio
Unlocking Upstream Resource Value Highgrading the Portfolio Increasing returns and profitability through disciplined investing Pursue only high-quality resources Secure stable, competitive fiscal terms Selectively develop most attractive projects Deploy world-class project execution capabilities App
Slide 39: Near-Term Growth
Unlocking Upstream Resource Value Near-Term Growth Improving profitability through higher-margin production growth Net Production Growth* KOEBD 1,200 U.S. Onshore Liquids Growth Starting up 24 major projects from 2014-2017 900 2016 & 2017 Projects 600 Doubling U.S. onshore liquids production 2015 Pr
Slide 40: 2014 Major Projects
Unlocking Upstream Resource Value 2014 Major Projects Eight projects added more than 250 KOEBD of working interest production capacity Net Production Growth* KOEBD 1,200 LNG Arctic Papua New Guinea Hibernia Southern Extension 600 2014 Projects 300 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Steam Injection Sub-Arctic C
Slide 41: 2015 Major Projects
Unlocking Upstream Resource Value 2015 Major Projects Seven projects adding 300 KOEBD of working interest production capacity Net Production Growth* KOEBD 1,200 Deep Water Heavy Oil Hadrian South Kearl Expansion 600 2015 Projects ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Deep Water Conventional West Africa Banyu Urip
Slide 42: Banyu Urip
Unlocking Upstream Resource Value Banyu Urip Significant oil development onshore Indonesia 450 MB onshore oil development Early gross production of 40 KBD reached in 2014 Central processing facility start-up mid-2015 Peak 165 KBD of gross capacity in 2015
Slide 43: West Africa Deep Water
Unlocking Upstream Resource Value West Africa Deep Water Capital-efficient subsea developments maximize value of installed capacity Nigeria: Erha North Phase 2 Develop 170 MBO of resource Gross 60 KBD subsea tieback to Erha FPSO Applying deepwater project learnings Angola: Kizomba Satellites Phase 2
Slide 44: 2016-2017 Major Projects
Unlocking Upstream Resource Value 2016-2017 Major Projects Nine projects adding more than 400 KOEBD of working interest production capacity Net Production Growth* KOEBD 1,200 2016 & 2017 Projects 900 LNG Conventional Gorgon Jansz Upper Zakum 750 2015 Projects ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Arctic Sub-Arcti
Slide 45: Hebron
Unlocking Upstream Resource Value Hebron Extending industry-leading Arctic development capabilities 700 MB oil development Constructing gravity-based structure Fabricating topsides Integrating topsides and gravity-based structure in Newfoundland 150 KBD gross production capacity
Slide 46: Odoptu Stage 2
Unlocking Upstream Resource Value Odoptu Stage 2 Applying high-impact technology to maximize recovery 290 MB oil development Extended-reach drilling achieving record well lengths > 7 miles Expanding facilities and adding well site Site civil work in progress 55 KBD gross production capacity
Slide 47: LNG Projects
Unlocking Upstream Resource Value LNG Projects Building upon a strong global position to meet growing LNG demand Alaska South Hook Western Canada Sakhalin Adriatic Golden Pass Qatar Tanzania PNG Western Canada Golden Pass Gorgon Scarborough Current Under Construction New Project Opportunities LNG Pr
Slide 48: Project Management
Unlocking Upstream Resource Value Project Management Best-in-class project execution Project Performance Actual vs. Planned, ‘10 – ‘14 average Industry-leading performance in complex Percent ExxonMobil Operated project development 140 Operated by Others 130 Effective development planning, design, an
Slide 49: U.S. Onshore Liquids
Unlocking Upstream Resource Value U.S. Onshore Liquids Adding more than 150 KBD of net production Net Production Growth* KOEBD 1,200 U.S. Onshore Liquids Growth Bakken Ardmore/Marietta ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 Permian * Production outlook excludes impact from future divestments and OPEC quota effects
Slide 50: Permian
Unlocking Upstream Resource Value Permian Capturing unconventional upside in a legacy basin Well positioned in premier tight oil play Midland Basin Enhancing position through trades and farm-ins Optimizing conventional assets New Mexico Central Texas Basin Platform Pursuing Wolfcamp unconventional D
Slide 51: Delivering Capital Efficiencies
Unlocking Upstream Resource Value Delivering Capital Efficiencies Driving down costs and increasing recovery Percent Reduction in Drilling Days Bakken Productivity and Costs Optimized completions and pad Year 7-Day Production Rate BOED $K/Stage 12 345 678 9 development Completion Costs/Stage 0 1,200
Slide 52: World-Class Operator
Unlocking Upstream Resource Value World-Class Operator Delivering industry-leading reliability performance Facility Reliability the value of installed Percent Maximizing capacity Incremental barrel is most profitable to produce 90 Improvement equivalent to major project KOEBD 94 Focusing on fundamen
Slide 53: Cost Management
Unlocking Upstream Resource Value Cost Management Managing cost to improve unit profitability Cost per Barrel* $/OEB Disciplined and consistent approach RDS 30 CVX Capturing market-driven efficiencies 25 BP TOT Implementing learnings from global operations 20 XOM 15 Driving organizational effectiven
Slide 54: Summary
Unlocking Upstream Resource Value Summary Well positioned to unlock maximum resource value Disciplined investment and selectivity Adding to a high-quality resource base Developing a broad, diverse project portfolio World-class operational excellence and project management expertise Growing higher-ma
Slide 55: Strengthening the Downstream & Chemical Portfolio
Strengthening the Downstream & Chemical Portfolio
Slide 56: Increasing the Advantage
Strengthening the Downstream & Chemical Portfolio Increasing the Advantage Strategically investing to outperform across the cycle Achieving strong operational excellence Improving feedstock flexibility Growing high-value product yield Driving operational efficiencies Increasing logistics capabilitie
Slide 57: 2014-2017 Projects
Strengthening the Downstream & Chemical Portfolio 2014-2017 Projects Progressing diverse portfolio of attractive investments across the value chain Naantali Slagen Project Type Fuels Edmonton Antwerp Lubes Chemical Tianjin Taicang Logistics Fujian Saudi Arabia Singapore Baton Rouge Mont Belvieu Beau
Slide 58: North American Downstream
Strengthening the Downstream & Chemical Portfolio North American Downstream Capturing North American value chain opportunities Mid-Continent* / Gulf Coast Equity Refining Capacity KBD Largest capacity in Mid-Continent / Gulf Coast Integrateds Refiners 2,500 Domestic crude processing up > 50% vs. 201
Slide 59: European Downstream
Strengthening the Downstream & Chemical Portfolio European Downstream Growing higher-value product yields at advantaged sites Selectively investing to capture shifting regional demand Antwerp: converting low-value fuel oil into higher-value diesel; start-up in 2017 Introducing premium diesel brands
Slide 60: Global Lubricants
Strengthening the Downstream & Chemical Portfolio Global Lubricants Expanding high-performance lubricants capacity Adding finished lubricants capacity in all regions Increasing high-quality basestocks capacity Synthetic basestocks up 25% Premium basestocks up 40% Deploying technology advantages
Slide 61: Global Chemical
Strengthening the Downstream & Chemical Portfolio Global Chemical Expanding advantaged commodity and specialty capacity U.S. Ethylene Production from Ethane* World-scale facility expansions Percent 100 U.S. Gulf Coast: ethylene and polyethylene facilities; 2017 start-up ExxonMobil Saudi Arabia: synt
Slide 62: Downstream and Chemical Summary
Strengthening the Downstream & Chemical Portfolio Summary Delivering industry-leading results through the business cycle Downstream and Chemical Combined ROCE Percent Superior financial performance Generating solid cash flow ExxonMobil Proven strategies and competitive advantages Selectively investi
Slide 63: Break
Break
Slide 64: Summary
Summary
Slide 65: Key Messages
Key Messages Continued focus on fundamentals in a lower price environment Selectively investing in attractive opportunities: 2014 Capex $38.5B; 2015 Capex $34B Growing higher-margin production: 4.0 MOEBD in 2014; 4.3 MOEBD in 2017 Delivering differentiated performance versus competition Industry-lea
Slide 66: Q&A
Q&A