Bonfire97 said:

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Look at the book values of XOM and RDS-A. These stocks are trading at ridiculous levels, IMO. This is just the typical cycle of the big boys trying to wipe out the independents and buy up their assets for cheap.

And, you aren't going to rid the world of millions of cars overnight and replace them with electric. The "analysts" saying that the oil companies are the next tobacco companies are a bunch of idiots.

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I think they are the next tobacco companies in the sense that "everyone" declared them dead decades too soon and smart investors made a ton of money on them.

Just bought some more XOM at 31.75

Same.

Chevron is now at XOM prices from a couple weeks ago.

All A&M said:

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fairviewcrew said:

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So the biggest "value" on any O&G company is the value of proved reserves... YE19 proved reserve value is based on avg 2019 prices, so ~$65 Brent. Today Brent is like $30... so the value of their underlying reserves is substantially lower than what is reflected on their YE balance sheet

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And I would add that the value of oil is whatever the Saudis say it is. Big wildcard.

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That needs to change

Anyone buying big oil yet?

Any word on if/when divided will be cut?

XOM dividend cut has to be soon. Chevron probably ok

Imagine XOM, Shell and BP cut dividends. As a shareholder of one of them I prefer fortifying the balance sheet and making cheap acquisitions vs stressing balance sheet over div payments.

Now, the next thing is share buybacks....

BCOBQ98 said:

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Anyone buying big oil yet?

Any word on if/when divided will be cut?

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Typically Exxon board decides at end of April for 2nd qtr dividend normally paid in June.

Don't see CVX cutting the dividend anytime soon. Heck, they'll cut salaries/capex/pensions/insurance before they cut the dividend.

RightWingConspirator said:

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Don't see CVX cutting the dividend anytime soon. Heck, they'll cut salaries/capex/pensions/insurance before they cut the dividend.

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Yep I agree. Just raised ($0.10/Q or $0.40/yr...up to $1.29/Q or $5.16/yr.) and paid 3/10/20

I went with 1/15/2021 $50 calls because honestly who really cares about the dividend?

"Be Greedy With Exxon Mobil Stock"

"With fear dominating in the market, it's time to be greedy. In particular, it's time to be greedy in sectors and stocks that are more sensitive to sharp economic downturns. I recommend starting with Exxon Mobil (NYSE:XOM) stock."

https://investorplace.com/2020/03/be-greedy-with-exxon-mobil-stock-while-others-are-fearful/

I like Exxon. They have sufficient buffers to get through this. I was not in favor of the new CEOs spend, spend, spend campaign. They're more exposed than they should be relative to position in industry. I see no scenario in near term that does not result in dividend cut.

Put in an order this morning for XOM.

"Another Exxon Mobil Executive Makes a $1 Million Stock Buy"

"For the second time this week, an Exxon Mobil executive has bought $1 million of the embattled energy giant's stock on the open market."

https://www.barrons.com/articles/exxon-mobil-executive-makes-a-1-million-stock-buy-51584650636

OXY and RIG though - yikes.

No surprises there.

Just so you XOM bulls understand their situation... at the strip XOM leverage will be >5x, and their outspend will be $20 B (this year)....

All that to say- dividend cut in half is a must, and drastic cut to capex (i would think $10b cut)...

Do That and leverage won't go to 5x...but they are still not in great shape

If there is sustained low prices (seems likely), xom stock likely continue to gets worse before it gets better.

With global oil demand in the tanks we might have global storage fill (and take prices to $10/bbl), unless demand snaps back soon (or Saudi/Russia cut big)

For all of you economist wizards, how will this major inflation of the US dollar effect Russia?

I think they cut before they get that far. The dividend and Capex will have to get slashed this year. The dividend at roughly $15 bln just can't work right now.

Yes, that's the point. They have to cut capex and divi... and even then b/s still not great at these prices

This price drop came at a terrible time for them, give. They were already "investing counter cyclically" and outspending at $60+

Agree. Bad timing but this thing will knock a lot of independents out and believe production really starts to roll over in 2020

Got a few different positions over the last week or so in the very low 30s...not a ton of $$ as trying to balance cash conservation (work in O&G industry so could be a rocky year). Feel like i will look back in 5 - 10 years and wish I would have bet the farm.

I'm in the same boat as you. Bought some because I feel like this is a great opportunity for a 3-7 year hold.

Agree. I purchased what i am comfortable with at this point and so I am probably done.

I am relatively young (36) and plan to just not log in to my 401k, investments, or company stock plan for at least 6 months maybe a year....its pretty ugly

planoaggie123 said:

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Got a few different positions over the last week or so in the very low 30s...not a ton of $$ as trying to balance cash conservation (work in O&G industry so could be a rocky year). Feel like i will look back in 5 - 10 years and wish I would have bet the farm.

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The issue I've had with this discussion is I think this comment will hold true for stock investments in general. But this thread is talking about XOM like it's some unicorn, don't understand taking the risk that this company recovers more than the broad market, given the additional risk it faces.

We shall see.

Right there with ya. I'm selfishly glad this is happening now while I'm young, because something like this is inevitable over an investing career.

Totally agree- there are a ton of other more attractive investment opportunities.... even in the energy biz. If you really want to play oil rebound CVX/RDS and COP sooo much better positioned than XOM to withstand a lower for longer scenario