ExxonMobil and Chevron Are Greenlighting a $6.8 Billion Project to Fuel More Growth in 2029

Core Insights - ExxonMobil and its partners, including Chevron and CNOOC, have approved the Hammerhead project in Guyana, expecting to invest $6.8 billion and start production by 2029 [1][5][4] - The Hammerhead project is part of a broader strategy to enhance production capacity and free cash flow, with ExxonMobil planning to invest around $140 billion into growth projects by 2030 [7][8] Group 1: Project Details - The Hammerhead project will involve the construction of a floating production, storage, and offloading vessel with a capacity of approximately 150,000 barrels per day, alongside drilling 18 production and injection wells [5] - This project marks the seventh approved initiative in the Stabroek Block, which has over 11 billion barrels of oil equivalent of discovered recoverable resources [4][6] Group 2: Growth Projections - ExxonMobil anticipates a growth in earnings capacity by $20 billion and cash flow by $30 billion by 2030, translating to compound annual growth rates of 10% for earnings and 8% for cash flow [8] - The company expects to generate a cumulative $165 billion in surplus cash over the investment period, which will be utilized for increasing shareholder returns, including dividends and stock buybacks [8] Group 3: Chevron's Involvement - Chevron's recent acquisition of Hess has enhanced its stake in the Stabroek Block, allowing it to participate in upcoming projects like Uaru, Whiptail, and Hammerhead, thereby extending its production growth outlook into the 2030s [9] - Chevron anticipates a significant boost in free cash flow, potentially adding up to $12.5 billion next year from completed large-scale capital projects [10][11] Group 4: Investment Outlook - Both ExxonMobil and Chevron are positioned as top-tier oil stocks, with expectations of growing production and cash flows into the 2030s, driven by projects like Hammerhead [12] - The combination of increasing cash flows and shareholder returns positions these companies as compelling long-term investment opportunities [12]