Core Viewpoint - Exxon Mobil's stock has experienced volatility following a failed breakout, with questions surrounding its ability to reclaim leadership in the energy sector after reporting lower-than-expected earnings and sales [1] Group 1: Company Developments - Exxon completed the acquisition of Pioneer Natural Resources, expected to more than double its Permian production to 1.3 million barrels of oil equivalent per day [1] - The company is focusing on its operations in Guyana, with a new $12.7 billion project named Whiptail, which will add approximately 250,000 barrels of oil by the end of 2027 [2] - Exxon is pursuing a case to block the sale of Hess to Chevron, which could extend until 2025 [2] Group 2: Financial Performance - In Q1, Exxon reported adjusted EPS of $2.06, a 27% decline from the previous year, while sales were $83.1 billion, down 4% [5][6] - This marks the second consecutive quarter of declining EPS, following drops of 53% and 49% in the previous two quarters [6] - Analysts estimate a potential turnaround in Q2 with a projected 26% profit increase despite a 1% sales decline [6] Group 3: Market Position and Stock Analysis - Exxon's stock is currently below its 50-day moving average and has a Composite Rating of 65, with an EPS Rating of 60 [7] - The stock's Accumulation/Distribution Rating is C-, indicating equal institutional buying and selling over the last 13 weeks [7] - Technical analysis shows the stock is below its early stage flat base, with a recent drop of 2.8% following mixed Q1 results [8] Group 4: Oil Price Influence - Crude oil prices have a significant impact on Exxon's stock performance, with rising prices lifting energy stocks earlier in the year [4] - Current WTI oil prices are around $77 per barrel, down from April highs, while gasoline prices have increased to an average of $3.61 per gallon [4] - The company is expected to rise and fall with crude oil prices, which may affect stock performance despite fundamental strengths [9]

Core Viewpoint - The ongoing conflict between Exxon Mobil and influential pension funds highlights the increasing politicization of corporate governance and shareholder activism, raising questions about the responsibilities of public officials and the priorities of corporate governance [8]. Group 1: Shareholder Actions - CalPERS and CalSTRS oppose Exxon's CEO and board directors, with CalPERS planning to vote against all board members following Exxon's lawsuit against activist shareholders [2]. - The New York State Common Retirement Fund plans to vote against 10 of Exxon's board members, reflecting a broader trend of politicizing public pension funds [3]. - Activist shareholders Arjuna Capital and Follow This have leveraged the SEC's policy change to push for environmental changes, which may not align with the financial interests of the majority of investors [5]. Group 2: Regulatory Environment - The SEC's new policy allows for broader inclusion of shareholder proposals addressing political concerns, potentially undermining companies' core missions [4]. - A federal judge ruled that Exxon can continue its legal action against Arjuna Capital, marking a significant moment in the struggle against shareholder activism [6]. - If Exxon prevails in its legal battle, it could lead the SEC to reassess its stance on shareholder proposals, favoring measures that enhance shareholder returns over politically motivated agendas [7]. Group 3: Implications for Corporate Governance - The conflict between Exxon and pension funds exemplifies the tension between corporate entities and public pension funds regarding the politicization of shareholder activism [7]. - The upcoming Exxon Mobil annual shareholder meeting serves as a microcosm of the larger debate over the role of politics in corporate governance [8]. - Decisions made in the coming months could set important precedents for how companies navigate the intersection of business interests and political activism [8].

Core Viewpoint - ExxonMobil's CEO Darren Woods and lead independent director Joseph Hooley are facing opposition from activist investors despite the company achieving record profits, stock performance, and market capitalization following a $60 billion acquisition of Pioneer Natural Resources [1]. Group 1: Activist Investor Actions - The California pension system (CalPERS), New York State Common Retirement Fund, and other activist investor networks are mobilizing to oppose the re-election of Woods and Hooley, with CalPERS planning to oppose all 12 board members [2]. - Complaints from these investors stem from Exxon's decision to sue activist shareholders Arjuna Capital and Follow This, arguing that their proposals have been previously rejected and that the lawsuit is a waste of resources [2]. Group 2: Proxy Advisory Firm Involvement - Proxy advisory firm Glass Lewis has recommended that shareholders oppose Hooley due to Exxon's "unusual and aggressive tactics" in its lawsuit against activist shareholders [3]. - Exxon has responded to Glass Lewis, requesting a change in their recommendation and disclosure of their conflicts of interest related to activist networks [3][4]. Group 3: Company Performance and Defense - Exxon defends its board, highlighting that it has overseen over $90 billion in earnings and more than $60 billion in shareholder distributions, while planning to invest over $20 billion in lower-emissions opportunities through 2027 [4]. - Louisiana Treasurer John Fleming supports the re-election of Woods and Hooley, criticizing the activist investors for attempting to disrupt the company for political reasons, which he believes could threaten financial market stability [4]. Group 4: Underlying Motivations - The situation reflects an effort by pension managers from states that restrict oil and gas activities, along with activist investors, to penalize Woods and Hooley for their success in the oil and gas sector [5]. - The irony lies in the fact that by prioritizing oil and gas investments to maximize returns, Woods and Hooley have become targets for investors favoring alternative priorities [5].

Core Insights - Energy stocks have significantly outperformed the broader S&P 500 index in 2024, contributing to the index's record-setting performance [1][2] - Rising crude oil prices, driven by OPEC's supply management and geopolitical tensions, have been a major factor in the strong performance of energy stocks [2][7] Energy Sector Performance - The S&P 500 index is up over 10% in 2024 and over 25% in the past 12 months, with energy stocks playing a crucial role in this growth [1] - Brent crude oil prices have increased by approximately 7% to over $80 per barrel, while WTI prices have risen nearly 10% to just under $80 per barrel [2] Company Highlights - ExxonMobil reported nearly $14.7 billion in cash flow from operating activities in Q1 2024, a $1 billion increase from Q4 2023, and achieved a nearly 18% gain in its share price this year [3] - Targa Resources experienced a record year in 2023 with a 22% increase in adjusted EBITDA and expects 8% growth in 2024, leading to a 50% dividend increase [4] - Diamondback Energy generated over $1.3 billion in cash from operating activities in Q1 and is set to enhance its cash flow through the acquisition of Endeavor Energy Resources [5] - Valero reported strong Q1 results despite maintenance activities and is expanding into renewable fuels, which positions it well for future earnings growth [6] Industry Outlook - The energy sector is benefiting from rising oil production and demand, allowing companies to generate cash for expansion and shareholder returns [7] - Despite the global shift towards lower-carbon fuels, oil and gas will remain essential for decades, making energy stocks a potential source of high returns [7]

Core Points - A federal judge in Texas has allowed Exxon Mobil to proceed with a lawsuit against activist investor Arjuna Capital regarding a climate change proposal, while dismissing claims against another activist, Follow This [1] - The lawsuit stems from a proposal submitted by the two investors for Exxon's annual shareholder meeting, which called for accelerated carbon dioxide emissions reductions [1] - The judge noted that the activist investors were using a "Trojan Horse" strategy to influence oil companies by aggregating shares to submit climate-related proposals [2] Group 1 - Exxon Mobil's lawsuit against Arjuna Capital can move forward, indicating potential legal challenges for activist investors in the oil sector [1] - The proposal for emissions reductions was withdrawn, but Exxon is concerned about future similar proposals from these investors [1] - The judge's comments suggest a recognition of the tension between large oil companies and activist investors focused on climate change [2] Group 2 - The judge emphasized that Exxon's skepticism towards activist investors is a rational response to perceived biases against the oil industry [2] - Arjuna Capital, which positions itself as a sustainable investment firm, may still modify and resubmit its proposal in future shareholder meetings [2] - The ruling highlights the ongoing conflict between traditional energy companies and the growing influence of sustainability-focused investors [2]

Core Insights - ExxonMobil and Petronas have made a significant hydrocarbon discovery in Block 52 offshore Suriname, marking the third major find in the area since 2020, indicating the Suriname-Guyana basin's potential for substantial oil and gas reserves [1][5] Discovery Details - The Fusaea-1 exploration well, located 170 kilometers offshore and 9 kilometers east of the Roystonea-1 discovery, was drilled to a depth of 5,227 meters, encountering multiple oil and gas-bearing sandstone reservoirs from the Campanian age, with zero Lost Time Incidents during drilling [2] - Further evaluations are being conducted by Petronas and ExxonMobil to assess the full extent of the discovery and its integration with previous finds, Roystonea-1 and Sloanea-1 [2] Leadership Statements - Petronas' CEO emphasized that the Fusaea-1 results solidify the company's position in Suriname's hydrocarbon resources, building on previous discoveries [3] - The vice president of Exploration at Petronas noted that the success of Fusaea-1 reflects advancements in understanding the area, enhancing the potential for oil and gas development in Block 52 [3] Operational and Strategic Developments - Block 52 covers 4,749 square kilometers and is operated by Petronas with a 50% interest, while ExxonMobil holds the remaining stake, highlighting the strategic importance of the Suriname-Guyana basin for future energy development [4] - Petronas has awarded a drilling contract to Noble Corporation's Noble Voyager rig, with an extension option to continue drilling another well in Block 52 at a daily rate of $470,000 [4] - Petronas also operates Blocks 48 and 63 with a 100% interest and holds a 30% non-operating interest in Block 64, indicating a commitment to exploration and production activities in the region [4] Broader Implications - The discovery aligns with ExxonMobil and Petronas' strategy to expand their hydrocarbon portfolios, with Petronas recently signing a new production-sharing contract and achieving 19 exploration discoveries in Malaysia in 2023 [5] - The ongoing exploration and development efforts in Suriname's Block 52 are expected to significantly contribute to the global energy supply, supporting energy security [5]

Core Viewpoint - ExxonMobil is facing significant backlash from CalPERS, a major pension fund, due to its aggressive legal actions against activist investors aiming to push for environmental reforms [1][2]. Group 1: Activist Investor Conflict - ExxonMobil's legal battle against Arjuna Capital and Follow This has led CalPERS to oppose all of Exxon's director nominees, including CEO Darren Woods, at the upcoming shareholder meeting [1]. - The activists had proposed a plan to reduce direct emissions and set targets for lowering emissions at suppliers and customers, which Exxon countered with a lawsuit that led to the withdrawal of the proposal [1][2]. - CalPERS criticized Exxon's lawsuit as "reckless," arguing it threatens shareholder activism and could set a precedent for silencing voices on various corporate governance issues [2]. Group 2: Historical Context - ExxonMobil has previously faced activist investors, notably in 2021 when Engine No. 1 successfully gained three board seats with a mere 0.02% stake, contrasting with CalPERS' current 0.2% ownership [3]. - CalPERS, which had supported the election of certain directors, is now opposing them due to their involvement in the lawsuit against the activists [3]. - The letter from CalPERS expressed hope that ExxonMobil's directors would reconsider their legal strategy, describing it as more akin to "schoolyard bullying" than effective corporate leadership [3].

Group 1: Exxon Mobil's Carbon Capture Initiative - Exxon Mobil Corporation, in partnership with Pertamina, has initiated an appraisal drilling project for a carbon capture and storage (CCS) hub in Indonesia, specifically the Asri Basin Project, which could store up to three gigatons of carbon dioxide and may require an investment of $2 billion [1][2] - The project aligns with Indonesia's climate change strategy, allowing CCS operators to reserve 30% of their storage capacity for imported carbon, enhancing the country's commitment to global carbon reduction efforts [2] - A framework agreement has been established with Korea National Oil Corporation (KNOC) to participate in the project, contributing to emissions injection into the facility [2] Group 2: Exxon Mobil's Global Oil Exploration - Exxon Mobil has announced an oil discovery off the coast of Angola in Block 15 at the Likembe-01 well, which was drilled to a depth of 3,013 meters, indicating the company's ongoing commitment to enhancing energy production [3] - The discovery is part of the Kizomba B development area, operated by ExxonMobil alongside partners Azule Energy, Equinor, and Sonangol, showcasing the company's dual focus on energy production and environmental sustainability [3] Group 3: Investment Opportunities in the Energy Sector - ExxonMobil currently holds a Zacks Rank 3 (Hold), while other energy stocks like SM Energy Company, Ecopetrol S.A., and Marathon Petroleum Corporation have better rankings, with Zacks Rank 1 (Strong Buy) [4] - SM Energy's 2024 and 2025 EPS estimates are $6.60 and $7.46, respectively, with upward earnings estimate revisions in the past week [4] - Ecopetrol's 2024 and 2025 EPS estimates are $2.55 and $2.63, respectively, also showing upward revisions recently [5] - Marathon Petroleum has increased its quarterly dividend by 10% and has a total shareholder return of approximately 31% in 2023, with EPS estimates for 2024 and 2025 at $19.53 and $16.78, respectively [5]

Subscribers to Schaeffer's Weekend Trader options recommendation service received this XOM commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.Energy giant Exxon Mobil Corp (NYSE:XOM) has seen a cup and handle pattern pullback to the 50-day moving average, into 2023 zone highs and is currently pushing back above its September peak. The 115 call l ...

Core Viewpoint - Activist investors, led by CalPERS, are opposing the re-election of ExxonMobil's CEO Darren Woods due to his pursuit of clarity on previously rejected shareholder proposals regarding greenhouse gas emissions [1][7] Group 1: Shareholder Proposals - ESG activist investors Arjuna Capital and Follow This attempted to resubmit a proposal for stricter greenhouse gas emission targets, which includes Scope 1, Scope 2, and Scope 3 emissions [1] - The proposal has been rejected by shareholders multiple times, indicating a lack of support for its implementation [3][7] - Resubmitting rejected proposals raises concerns about pushing a political agenda rather than focusing on financial impacts [4][5] Group 2: Financial Implications - The costs associated with carbon accounting reports can exceed $1 million annually, which would financially burden the company without guaranteeing actual emission reductions [2] - Accepting the proposal could lead to a focus on lower emissions at the expense of fundamental efficiency, negatively impacting financial performance [3] - The SEC notes that a single shareholder proposal can cost a company up to $150,000, which shareholders ultimately bear [4] Group 3: Corporate Governance and Legal Actions - The ongoing litigation by ExxonMobil aims to block the inclusion of the shareholder motion, highlighting the need for clarity on material issues [5][6] - CalPERS' opposition to the CEO's renomination is seen as prioritizing social policy over sound management principles, conflicting with fiduciary responsibilities [7] - The SEC's shift in policy allows more social issues to be raised at shareholder meetings, which could undermine the efficiency of capital markets and investor choices [8]