Things haven’t been this bad for the world’s biggest oil company’s stock since Ronald Reagan became president. But 2019 may not be much better.
As The Houston Chronicle reports, ExxonMobil, down 22% for the year, is headed for its worst annual performance since 1981, when the U.S was in recession and a 20-year crude glut was just beginning. The decline comes as ExxonMobil pursues one of the largest restructurings in its modern history, a seven-year, $200 billion push for oil in South America and natural gas in Mozambique and Papua New Guinea.
With one of corporate America’s strongest balance sheets, the concern isn’t whether ExxonMobil can fund the rebuild. The question from investors: What can you do for me in the meantime? The awkward answer may be “not much,” at a time when oil prices are plummeting.
As rivals restrain growth and buy back stock, ExxonMobil is the one “with the bull’s-eye on their back,” says Mark Stoeckle, who manages $2.6 billion including ExxonMobil shares at Adams Express Co.
ExxonMobil’s problems largely stem from flag-planting deals made at the peak of commodity prices over the past decade. ExxonMobil spent $35 billion on U.S. shale gas producer XTO Energy Inc. in 2010 when the real money was to be found in shale oil. It also invested $16 billion in Canadian oil sands since 2009, only to de-book much of the reserves.