Despite the fact, the crude oil prices have been plunging and have plunged as much as 50%, Exxon is making an effort to maintain its standard.
The reducing crude oil prices in the oil and gas industry has led to energy giants getting into mergers and acquisitions. Presently, according to Bloomberg reports, Exxon Mobile Corporation and Chevron Corporation along with a number of other leaders in the oil market have a budget of $500 billion in cash and equity to either acquire or merge with their rivals.
Both the market leaders Exxon and Chevron have set certain amounts aside for these potential mergers and acquisitions; $320 billion in reserves have been set aside by Exxon while $65 billion in stock has been set aside by Chevron. Because of these plunges in the crude oil prices, major oil companies such as Baker Hughes, Halliburton Company, Schlumberger Limited and a number of other have already entered into either partnerships or acquisitions, as these companies are aiming at improving their balance sheet, productions as well as maintaining operational efficiency.
However, both Exxon and Chevron, the two energy giants have $385 billion in reserves total and are positioned in a way that their deals will likely take on their rival gas and oil companies. The world’s top most oil and gas company being Exxon is expected to make an acquisition offer in either the coming month or year. The reason for this surety is that it company had reported better than expected results for the previous quarter of the current fiscal year and exceeded the expectations of stock analysts by as much as 89 cents. Despite of the fact that Exxon’s stock in the time span of 52 week declined by almost 15.5%, the energy giant is determined to keep its head up and maintain its spot as one of the world’s leading Energy Company.
The company plans to maintain its spot of being the world leader through this time when the crude oil prices are low as unlike other companies Exxon did not cut its workforce in order to reduce cost neither did it cut its production target. Despite of the deteriorating crude oil prices, the company increased its production target by 3.9 million barrels in the most recent quarter of the fiscal year. The production target in the same quarter of the previous fiscal year was 3.89 million barrels of oil per day.
On a separate note, Exxon’s interest either acquiring or merging with Apache Corporation has increased since the rebuff of the offer by Anadarko Petroleum happened. So there’s a good chance that Exxon might be interest in that company. Apart from that, in the past twenty years the company has managed to sign two major deals which were worth $88 billion and $35 billion. Furthermore, the energy giant wanted to increase its presence in the Permian Basin region so it went ahead and signed five deals there as well.