ZACKSยท2025-09-23 15:31Core Insights - ExxonMobil Corporation (XOM) and ConocoPhillips (COP) are major players in the energy sector, with XOM having an integrated business model while COP focuses primarily on upstream activities [1][3] - Over the past year, XOM's stock has seen a slight decline of 0.8%, whereas COP's stock has dropped by 12.8% [1] Company Operations - ConocoPhillips has a strong presence in the Lower 48 states, particularly in the Permian Basin, and has recently completed integration with Marathon Oil's assets, leading to increased production and operational efficiency [3][4] - ExxonMobil's key upstream assets include the Permian Basin and offshore Guyana, with expectations to grow Permian production to 2.3 million oil equivalent barrels by the end of the decade and a resource base of approximately 11 billion barrels in Guyana [4] Shareholder Returns - ConocoPhillips is committed to returning capital to shareholders but has faced dividend volatility due to commodity price fluctuations, while ExxonMobil has a long history of consistent dividend increases supported by its integrated business model [5][6] - ExxonMobil's dividend payments have remained stable, benefiting from its refining business during periods of low oil prices, while ConocoPhillips had a significant dividend cut in 2016 [6] Financial Health - Both companies maintain strong balance sheets, but ExxonMobil has a lower debt-to-capitalization ratio of 12.6% compared to ConocoPhillips' 26.4%, indicating lower debt exposure [7] - In terms of valuation, ConocoPhillips trades at a trailing 12-month EV/EBITDA of 5.20X, which is lower than ExxonMobil's 7.19X, suggesting that investors are willing to pay a premium for ExxonMobil's earnings [8] Market Outlook - The U.S. Energy Information Administration (EIA) projects a significant decline in oil prices, with an average spot price of West Texas Intermediate crude expected to be $64.16 per barrel this year, down from $76.60 last year [9][10] - Lower oil prices are likely to negatively impact exploration and production activities for both ConocoPhillips and ExxonMobil [10]