Exxon Mobil

IThe business

Exxon Mobil finds, produces, refines and sells oil, gas and chemicals. It reports four businesses. Upstream produces oil and gas. Energy Products refines crude into fuels and sells them. Chemical Products makes plastics and chemicals. Specialty Products makes lubricants, basestocks and resins.² In 2025 Upstream earned $21.4B, Energy Products $7.4B, Chemical Products $0.8B and Specialty Products $2.9B. Corporate and Financing cost $3.6B. The total was $28.8B R (reported).² So about three quarters of the segment profit came from the ground, and the rest came from turning what is pumped into products people use.

One change in 2026 is worth stating first. On 1 July 2026 Exxon Mobil Corporation, a New Jersey company, completed a reorganization that put a new Texas company, ExxonMobil Holdings Corporation, at the top. Each share was swapped one for one, the ticker XOM stayed on the New York Stock Exchange, and shareholder rights now follow Texas law.¹¹ The company says the business, the assets and the accounts did not change. I give both registrants in the sources, since the 2025 filings sit under the old CIK 0000034088 and the 2026 results sit under the new CIK 0002115436.²³ Third-quarter figures I use are preliminary numbers from the 30 October 8-K. The Form 10-Q for that quarter was not on file when I wrote this.³

Where the barrels come from

Production in 2025 averaged 4.74 million barrels of oil equivalent a day, up from 4.33 million in 2024 and 3.74 million in 2023.² The company says it was the highest in over 40 years. Two engines did it. The Permian Basin in Texas and New Mexico reached 1.6 million barrels a day net, helped by the $63B all-stock purchase of Pioneer Natural Resources, which closed on 3 May 2024 and issued 545 million shares.²¹² Guyana reached 715 thousand barrels a day gross for the year, and 870 thousand in the fourth quarter, once its fourth ship, the Yellowtail, started.² ExxonMobil operates the Stabroek Block there with 45%. Chevron holds 30% after buying Hess in 2025, and the Chinese state company CNOOC holds 25%.¹³ That is secondhand and I could not find the split in the 10-K. Management says about two thirds of the company’s production now comes from the Permian, Guyana and LNG.²

Gas matters more than it used to. Exxon Mobil takes part in 45.7 million tonnes a year of Qatari gas liquefaction capacity, with 3.4 billion cubic feet a day of flowing gas, and it owns 30% of the Golden Pass LNG plant on the US Gulf Coast.² In 2026 that Qatari exposure turned from an asset into a problem, which I come to below. The Golden Pass plant had mechanical completion of its first train in late 2025, and the company says Golden Pass volumes added to upstream earnings in 2026.²³

The other half: refining and chemicals

The downstream arm is large. In 2025 refineries ran 3.98 million barrels a day, Energy Products sold 5.59 million, and chemical sales were 21.3 million tonnes.² It earns less than the ground, with a return on capital of 19.7% in Energy Products, 2.7% in Chemical Products and 35.4% in Specialty Products in 2025 against 10.2% in Upstream R (reported).² Chemicals had a poor year. Earnings fell from $2.6B to $0.8B.² Then 2026 changed the picture. The company’s refining margin indicator, which is a Platts-based measure of what a barrel of crude earns in a typical refinery, averaged $50.3 a barrel in the third quarter, against $18.3 in the fourth quarter of 2025.⁵ The report calls it the result of unprecedented cuts in global refining capacity.¹¹ Energy Products earned $9.1B of adjusted profit in that one quarter, and $16.0B in nine months against $4.0B a year earlier.³

The year the Strait closed

2026 is not a normal year. A war with Iran closed the Strait of Hormuz, the narrow sea lane out of the Gulf. The EIA’s October outlook assumes Middle East oil flows stay constrained through the fourth quarter.⁷ Brent, the world oil benchmark, averaged $80.61 in the first quarter, $104.52 in the second and $97.01 in the third.⁵ The EIA’s daily series has it near $125 in October.¹⁷ Those prices are in the share price, and I describe them on the Saudi Aramco page on this site, which has the same oil deck as this one.

For Exxon Mobil the closure cut both ways. Higher oil lifted Upstream by $5.3B in nine months. But the same war hit its own barrels. The filing says Middle East disruption cut first-half earnings by $1.28B in Upstream and $0.46B in Energy Products, and the third quarter shows the same pattern: Asian gas production was 1,818 million cubic feet a day in the first nine months, against 3,272 a year earlier C (calculated).¹¹⁵ Press reports say Iranian strikes damaged two of Qatar’s 14 liquefaction trains and that QatarEnergy puts repairs at three to five years. I cannot confirm that from the company, so I treat it as secondhand.¹⁸ Oil-equivalent output was 4.50 million barrels a day in the third quarter and 4.53 million for nine months, 2.5% under the year before C (calculated).⁵

Nine-month net income was $34.1B against $22.3B a year earlier. Adjusted earnings were $41.0B, operating cash flow $57.9B and free cash flow $39.0B.³ Third-quarter operating cash flow was $25.7B and free cash flow $19.1B.³ I do not carry any of that forward as a run rate. The ten-year table in Section V shows what the company earned when oil sat near $70. The chart shows the share up 56% from December to October and Brent’s monthly average up 100% over the same months.

Two more gas projects matter. In Mozambique the company works on Rovuma LNG, where the 10-K says force majeure was lifted and a final investment decision is planned for 2026, and the 30 October release says it agreed to raise its interest to 50%. In Papua New Guinea it took over as operator of Papua LNG and agreed to raise its stake to 34%.²³

Capital, dividend and buyback

Capital spending in 2026 is planned at $27B to $29B, of which only $8.5B is firm commitments.²¹¹ That matters. Most of the programme can be cut if prices drop, and I use it in the bear case. The company paid $17.2B of dividends and bought back $20.3B of stock in 2025.⁴ In the third quarter it paid $4.3B in dividends and bought back $5.1B, declared a fourth-quarter dividend of $1.07 a share, up 3.9% from $1.03, and said it plans $20B of repurchases in 2027 if market conditions are reasonable.³ That is 44 years of annual dividend increases, by the company’s count.³ Net debt was $22.1B at 30 September: $34.3B of debt less $12.2B of cash.³ Nearly $11B of that was repaid in nine months.³

What the company says it will do

In December 2025 management raised its plan to 2030. It targets $25B more earnings and $35B more cash flow than 2024, at constant prices and margins and a $65 real Brent price, with production at 5.5 million barrels a day by 2030 and about $145B of cumulative surplus cash flow over five years.¹⁹ Capital spending is said to be unchanged from the earlier plan.¹⁹ I treat all of this as a target. My base takes between a third and three fifths of the cash-flow growth in it. The bull takes more. Section VI explains why.

IIThe moat

For an oil company, the first test is whether it can make money at a price it does not control. The second is whether it can keep the profit when the price falls. The third is whether the profit survives the people who control the ground. Exxon Mobil passes the first better than most. It passes the second at a cost. On the third it is better placed than a state company, but less than the headline profit suggests.

First: cost, scale and integration

Management measures what it calls structural cost savings, cuts in cash operating cost that it expects to last, against 2019. The cumulative figure reached $16.9B at 30 September 2026, with $1.8B added in nine months, against a plan of $20B by 2030.³ In 2025 alone it added $3.0B.² Cash operating expenses, excluding energy and production taxes, were $44.1B in 2025 against $44.0B in 2019, while production rose by about 20%: $4.9B of market cost increases and $10.3B of extra activity were absorbed by $15.1B of savings C (calculated).² I read that as real, and the cleanest evidence of an advantage that rivals can copy only slowly.

Integration is the second source. The refineries and chemical plants take crude and gas from the same company. The company says its refineries ran at 100% at its US Gulf Coast sites in the third quarter and that distillate output from the Gulf Coast is about 40% above 2019, after the Beaumont expansion.³ Those are claims I cannot check from outside. What I can check is what it earned. In the first nine months of 2026 Energy Products made $16.0B of adjusted profit when the refining indicator averaged $32 a barrel across three quarters.³⁵

Second: through the cycle

Net income was positive in nine of the last ten years. The tenth, 2020, was a net loss of $22.4B after large write-downs, in a year when Brent averaged $42.⁴¹⁷ The business did not stop paying. It kept the dividend, raised debt to $67.6B, and cut capital spending. Its dividend per share rose in every year of the decade, from $2.98 to $4.00, by cash paid.⁴ So the protection held, but at a cost. In 2020 the owners were paid $14.9B in dividends while the business produced $14.7B of operating cash flow and spent $17.3B on plants C (calculated).⁴

That chart shows what the protection does not do. It does not shield the profit from the oil price. Net income went from $55.7B in 2022 to $28.8B in 2025, a fall of 48%, while Brent fell 32%, from $100.9 to $69.1 C (calculated).⁴¹⁷ Costs and depreciation do not fall with the price. Depreciation and depletion rose from $24.0B to $26.0B over the same years.⁴

Third: what reaches the owner

Here Exxon Mobil is better placed than the state companies. It pays tax to governments, but its shareholders elect the board. Income tax took 28% of pre-tax income in 2025 ($11.5B on $41.3B), and total taxes and duties, including sales-based taxes, were far larger.⁴² In Guyana the contract shares oil with the state, so net volumes fall as prices rise. The company calls this an entitlement effect, and it cut third-quarter volumes by 87 thousand barrels a day against the second quarter.⁵ That is a feature of the contract that most summaries skip.

Evidence it is widening

Cost cuts keep rising. Production is higher than at any time in four decades. Oil-equivalent reserves of 19.3 billion barrels are 36% undeveloped, and the company added 2.0B barrels of proved undeveloped reserves in 2025 through extensions and discoveries, mainly in the US and Guyana.² And Stabroek is still growing: Hammerhead, the seventh development, was approved in September 2025 and is due to start in 2029, with eight ships planned by the end of 2030.²

Evidence it is narrowing

Returns are not good. The company’s return on average capital employed was 9.3% in 2025 and 12.7% in 2024, on $305.8B of capital employed, with a US Upstream return of only 4.3%.² That is partly the Pioneer purchase, which put $63B of stock into the capital base at 2024 prices. It is also the chemical arm, at 2.7%. Management targets more than 17% by 2030.¹⁹ And proved reserves fell. Production used 1.8B barrels in 2025, downward revisions took 0.9B, and additions were 2.1B from extensions and discoveries.² Reserve life at 2025 output is 10.7 years on proved reserves C (calculated). The resource base is larger and the company has a pipeline, but a business that must keep drilling to stand still is not a fortress.

My judgement: scale, cost and the best acreage in two basins make this a better business than most. The protection is wide in costs and narrow in returns, and it does not stop oil falling. It makes a bad year survivable. That is worth something, and I price it through a lower discount rate than I use for a state company.

IIIThe competitive advantage

Saudi Aramco is the one other oil company on this site and I compare with it by name below. I add Chevron, the other large American company, from market data. The table measures what a buyer of the shares gets and not the size of the operation.

Exxon Mobil is the most expensive of the three on earnings and pays the lowest yield. In return it gets what the other two cannot offer together: a board that answers to owners, a balance sheet with $22.1B of net debt, and two growth engines, the Permian and Guyana, that are not near the Gulf. Chevron has a similar profile with a market value 40% smaller and net debt of $28.6B; it also owns 30% of Stabroek since the Hess purchase, which makes the two companies partners in Guyana as well as rivals.¹³ Saudi Aramco has a bigger yield and a cheaper price against earnings, but 97.5% of it belongs to the Kingdom, which sets the royalty and the output. On that page I value the share at SAR 18.1 and it sits 43% above that. Exxon Mobil sits 39% above its base. Neither is cheap against my values. They differ in who owns the cash.

Where Exxon Mobil wins

Ownership is first. The shareholders have a vote, and they have used it: a shareholder proposal printed in the proxy statement says the company lost a 2021 proxy contest to the activist fund Engine No. 1.¹⁰ Second, the two growth assets sit in places where the political risk is lower than in the Gulf: Texas and New Mexico, and the waters off Guyana, though Venezuela’s dispute with Guyana over the border is a risk I take up in Section VIII. Third, the company is diversified. When Qatari gas was disrupted, refining earnings made up more than the loss. In nine months Energy Products and Chemical Products together earned $13.0B more, adjusted, than a year earlier C (calculated).³

Where it loses

It loses on price against earnings, on yield, and on return on capital. A 9.3% return in 2025 is well under the 17% the company targets for 2030.²¹⁹ It also loses on one structural point. A share bought at $187 pays a dividend of 2.3% and a buyback of about 2.6% of the share price planned for 2027, and the earnings behind both are at a peak for a refining and oil cycle that the war created C (calculated).³¹

The next best use of the same money

The simplest alternative is the 10-year US Treasury, which yielded 4.94% on 30 October.²⁰ The share’s cash yield, dividend plus buyback, is about 4.9% of the price C (calculated). That is level with the bond, but the bond is a fixed claim and the share is not. The payout has to grow for the share to beat it, and it has to do that in a business whose profit depends on the oil price. In my base, owner cash is $38B in 2028 and $43B in 2036. Against Chevron, a dollar buys more yield. Against Saudi Aramco, a dollar buys a lower yield with more control. On this site, the other energy names are Cameco and Constellation Energy, 97% and 20% above my base value on their pages. A price above value is common in this group. Exxon Mobil’s 39% sits between them. I come back to the price in Valuation.

IVManagement

Darren Woods is chairman and chief executive. He is 61, joined the company in 1992, has run it since January 2017, and was president from 2016.¹⁰ Neil Hansen is senior vice president and chief financial officer. He signed the June 2026 quarterly report as such, and replaced Kathryn Mikells, who held the job from 2021 and retired at the start of 2026.²¹²² Joseph Hooley, the former chair and chief executive of State Street, is the lead independent director. One person is both chairman and chief executive. Jeffrey Ubben did not stand for re-election at the 2026 meeting.¹⁰

How they are paid, and what it pays them to do

The proxy says performance shares, which are restricted stock units granted on the basis of individual and company performance, make up more than 70% of total direct pay for the senior team. The annual bonus is 10% to 20% and base salary 10% or less.¹⁰ Half of each performance-share grant vests five years after it is made. The other half vests after ten.¹⁰ Shares are not adjusted when the price moves, so executives see a one-for-one change in what they own.¹⁰ The CEO’s total pay for the pay ratio was $33.1M in 2025, 25% lower than in 2024, and the median employee was paid $183,084, a ratio of 181 to 1 R (reported).¹⁰

That design pays them to do two things. It pays them to keep the share price up over a decade, since most of the pay is locked in stock. It pays them to avoid a blow-up. But it does not tell me what is measured. The Compensation Committee weighs four equally weighted objectives (operations, financial performance, energy transition and business portfolio) against inputs such as safety, return on capital employed, cash flow from operations and asset sales, and total shareholder return, and does not publish a formula.¹⁰ So I cannot say how much a dollar of extra return on capital is worth to the executives. I can say that the bonus ceiling moves with year-over-year earnings.¹⁰ In a year like 2026, when earnings roughly double because of a war, that ceiling goes up with no change in skill. Discretion is the check on that, and discretion is not a number.

Read that table twice. Woods owns about $70M of stock outright and far more unvested, so his own money is in. The proxy says his stock, vested and unvested, is 111 times his salary.¹⁰ The proxy puts the typical guideline at 6 times salary, and the CEOs of its benchmark companies at 6 to 12 times.¹⁰ It is not a large stake in the company: all 24 people together own 0.03%, and the largest holders are three fund managers. Vanguard owns 10.4%, BlackRock 6.5% and State Street 5.1%, by the proxy’s count.¹⁰ A holder who wants a different strategy has to persuade those funds.

What they did with capital over a cycle

Judge the managers by what they did with the money. In the five years to 2021 the company bought back almost no stock: $0.2B in 2021, and under $1B in each year from 2016 to 2020.⁴ It held the dividend, took debt from $42.8B in 2016 to $67.6B in 2020, and wrote down assets in 2020, a net loss of $22.4B C (calculated).⁴ That is what the pay design asks of them, to survive. It also meant the company was in debt at the bottom of the cycle, and not buying shares at $31, the low close in March 2020.¹

Then came the reverse. After the price recovery, the company bought back $72.8B of stock in 2022 to 2025, $15.2B, $17.7B, $19.6B and $20.3B, and paid $63.8B in dividends over the same four years C (calculated).⁴ Over the ten years the share count went from 4,148 million to 4,179 million at year-end 2025, and 4,079 million at 30 September 2026, though the company spent $76.3B on buybacks, because it issued 591 million shares for acquisitions C (calculated).⁴⁵² Pioneer’s 545 million shares were worth $63B when issued, and Denbury’s 46 million were worth $4.8B.¹²² So much of the buyback was spent to offset the shares it had already used to acquire growth. I cannot say whether a share issued for Pioneer at $116 was a good price, and I do not think anyone can before the Permian inventory has been drilled. I can say the buyback is not a pure return of cash.

Two more points on capital. The company says only $8.5B of its 2026 capital programme is firm, and another $8.0B is committed for 2027 and later.² That flexibility is the strongest sign that management accepts the cycle. And in the first nine months of 2026 it spent $15.1B on buybacks, while net debt fell by nearly $11B.⁵³ Buying back stock at a record price is a choice. At $187, a $20B buyback retires about 2.6% of the company.

Governance

Two features deserve a plain statement. The first is the retail voting programme. Holders who enrol give a standing instruction to vote with the board’s recommendations, and the company sends reminders that name the board’s view.²³ A shareholder proposal printed in the proxy, from the New York City Comptroller’s office, asks that the programme offer options not aligned with the board. It states that the company lost a 2021 proxy contest to Engine No. 1 and sued shareholders who filed proposals in 2024.¹⁰ I give those as that office’s statements, and not as findings. The second feature is the move to Texas. Shareholder rights now follow the Texas Business Organizations Code, and the proxy sets out the differences from New Jersey law.¹¹¹⁰ I have not tried to judge which is better for a holder. I note only that it was management’s proposal.

VFinancials

Ten years, 2016 to 2025, from the company’s annual reports, with the first nine months of 2026 from the 30 October release. The numbers are in US dollars. Figures for 2016 to 2025 come from the 10-Ks and the tagged data the SEC publishes from them.⁴² Third-quarter figures are preliminary company numbers and were not yet in a 10-Q.⁵ Net debt is debt less cash and equivalents, and I do not add minority interests, pensions or leases.

The pattern is a business that moves with oil but not in step. Net income was $55.7B in 2022 and $28.8B in 2025, 48% lower, while Brent averaged $100.9 and $69.1 C (calculated).⁴¹⁷ In the ten years, revenue ranged from $181.5B in 2020 to $413.7B in 2022. Net income ranged from a $22.4B loss to $55.7B. Dividends per share paid rose every year, from $2.98 to $4.00 R (reported).⁴ Production was flat near 3.7 to 4.1 million barrels a day until 2023, then jumped to 4.74 million. Debt peaked at $67.6B in 2020 and net debt at $63.3B C (calculated).⁴ By 2022 cash was $29.6B and net debt only $11.6B. Cash then fell to $10.7B by the end of 2025 as buybacks, the Pioneer integration and capital spending ran ahead of the cash coming in.

Return on capital is the weak line. The company’s own measure was 9.3% in 2025 and 12.7% in 2024.² The nine-month result in 2026 is better, but it is a windfall.

Spending

Additions to property, plant and equipment rose from $12.1B in 2021 to $28.4B in 2025, 2.3 times. Depreciation and depletion was $26.0B in 2025 including impairments, so spending ran 1.1 times depreciation C (calculated).⁴ The company plans $27B to $29B in 2026 and $20.2B was spent in nine months on plant and equipment alone.¹¹³ It does not split sustaining spending from growth spending, so I cannot say how much simply holds production flat. I test what happens if the total moves by $3B in either direction, and it is worth about $9 a share E (estimate).

What an owner can take out

Operating cash flow is not the number an owner can spend. Capital goes out first. Then the company pays dividends to the minority holders in its subsidiaries, a small line but it grew from $0.2B in 2016 to $0.9B in 2025. And it issues restricted stock to its staff, a cost that is not in cash but is real to an owner: $1.0B in 2025 against $0.6B in 2023.⁴² I subtract all of them. Working capital I show both ways, because it swings, and the year-end receivables and payables are the result of a price and not of the business.

The picture is this. In 2022 owner cash was $55.9B and the company paid out $30.1B, and cash rose to $29.6B. In 2023, 2024 and 2025 it paid out more than owner cash each year, and the gap grew. Dividends and buybacks totalled $37.5B in 2025 against owner cash of $21.0B as reported, $28.7B before working capital. The gap was met by cash, which fell from $23.0B to $10.7B in 2025, and by a little net borrowing C (calculated).⁴ Over ten years owner cash was $195B, which is 13% less than the $224B paid out, and 10% less than the $218B of net income C (calculated). A good part of that ten-year gap is the working capital build in 2023 to 2025, which can come back if prices stay lower. The last twelve months look much better, at $44.6B before working capital, 119% of a $37.5B payout. That is a windfall year and I do not treat it as normal.

2026 so far

The first nine months gave net income of $34.1B, against $22.3B a year earlier, and adjusted earnings of $41.0B against $22.5B.³ Third-quarter operating cash flow was $25.7B, free cash flow $19.1B, and $9.4B went out as dividends and buybacks.³ Nine-month free cash flow was $39.0B. Working capital absorbed only $1.6B in the period, though receivables rose from $44.6B to $66.5B and payables from $60.9B to $78.6B, so the swing is two large numbers that nearly cancel C (calculated).⁵ Cash was $12.2B at 30 September, long-term debt $29.7B and notes payable $4.5B.⁵ Net debt of $22.1B is 2.9% of market value C (calculated).

Look at where the windfall is. Energy Products earned $16.0B of adjusted profit in nine months against $4.0B, and the quarterly refining margin indicator went from $16.3 to $29.0 to $50.3 a barrel.³⁵ That gain depends on cuts in global refining capacity, which the company’s own filing calls unprecedented.¹¹ I do not carry it forward. My base has refining margins back near their normal level from 2027 and Brent at the EIA’s $84 for that year, after $105 for the fourth quarter.⁷ The balance sheet is a strength. The ten-year table shows how fast things change: net debt was $11.6B in 2022, $32.9B in 2025 and $22.1B now.

VIValuation

First, how this goes badly wrong

Before any number, I ask what would most likely destroy the value of a share, and work backward. For Exxon Mobil I see three.

The first is that oil and margins both fall back at once while the spending and the payout stay. 2026 profit rests on Brent near $97 and a refining margin of $50 a barrel. If Brent sits near $58 from 2028, which is my bear, and refining and chemicals earn what they did in a middling year, owner cash drops to about $20B a year, which is 54% of a $37.5B payout of dividends and 2027 buybacks E (estimate). The company would have to stop buying back shares, as it did from 2016 to 2021, or borrow. The share would then be priced as a business that returns 2% to 3%, and not as one that returns 5%.

The second is capital allocation at the top of the cycle. The company paid $63B in stock for Pioneer in 2024 and now earns its highest profits ever. A large purchase made out of the 2026 windfall would be priced off today’s oil. The company says its 2026 programme is $27B to $29B and mostly not committed. I cannot price a deal that has not been made. I flag that the record is mixed: a 9.3% return on capital in 2025, after the Pioneer shares went into the base.²

The third is a physical or political break in a place that matters. Stabroek in Guyana is the best asset in the company, and Venezuela disputes the border around it. Qatar’s trains are damaged. Kazakhstan’s oil leaves through a pipeline across Russia. I price each of these in Section VIII. None is enough on its own to cut the base by more than about $2 a share, but the Guyana case would hurt the growth that the whole base depends on.

What I can and cannot judge

I can read a cash flow statement, run a sensitivity the company itself publishes, and tell you what a $1 move in Brent does to profit. I cannot say when the Strait reopens, where oil trades after 2028, or what refining margins settle at once capacity returns. Those matter most, so I give a range. I also cannot split capital spending into the part that holds production flat and the part that grows it, because the company does not, so I tested the effect of moving the total by $3B a year: about $9 a share either way E (estimate).

Cash after stock pay and after standing still

The cash that matters is owner cash: operating cash flow before working capital, less capital spending, dividends to minority holders and stock pay. In 2025 it was $28.7B, level with net income of $28.8B and 52% below the $59.7B of operating cash flow before working capital. After the working capital build of $7.7B it was $21.0B C (calculated).⁴² Stock pay was $1.0B, which is 3.5% of net income.² That is small, and I deduct it anyway. Capital spending is the real question. Net spending was $29.1B in 2025 and depreciation was $26.0B. If the extra $3B is all growth, owner cash is understated. If it is the cost of keeping 4.7 million barrels flowing, it is not.

The method, in plain words

The model has four parts. First, a baseline: operating cash flow before working capital at a Brent price of $69.1, the 2025 average, which was $59.7B in 2025. I move that baseline by case, from $56B to $64B in 2027 and from $59B to $78B by 2030, which is where the volume growth, the downstream margin and the cost savings go. Second, the oil price effect. The 10-K says that in 2026 a $1 move in Brent changes after-tax Upstream earnings by about $700 million, and that a $0.10 move in Henry Hub moves them $90 million and in the TTF gas price $20 million.² I use $0.7B per $1 of Brent and keep gas at the EIA’s $3.16 for Henry Hub, so gas sits in the baseline. Third, capital spending, minority dividends and stock pay. Fourth, the discount rate and the growth after 2036.

I discount at 8.4%. That is the 10-year Treasury at 4.94% on 30 October plus 3.5% for owning a large oil and gas producer whose profit swings with prices.²⁰ I add nothing for state control, because here shareholders elect the board, and I add nothing for debt, because interest is already paid out of operating cash flow and net debt is only 2.9% of market value. That is half a point lower than the 9.0% I use for Saudi Aramco, where I add half a point for the state. After 2036 cash grows at 0.5%, 1.5% and 2.5% in the three cases. Cash for November and December 2026 comes first, set from the third quarter’s operating cash flow before working capital of $23.4B on 92 days, moved for the oil price. Each later year arrives at year end. Per-share values divide by 4,079 million shares.⁵ The weighted value is $137 using 25%, 50% and 25%, which I do not use for the three values.

This is a test of whether the baseline is stable. It is not. It was $32B in 2019, $43B in 2021, $55B in 2022, $49B in 2024 and $60B in 2025 C (calculated). That is the range inside which any cash flow forecast for this company has to sit, and it is why I give three cases. My base starts at $61.5B in 2027, which is level with 2025 and 2026 after taking the refining windfall out. It reaches $69B by 2030. The plan implies about $81B at $65 oil in constant dollars: the 2024 figure at that price, $46B, plus the $35B of growth C (calculated).¹⁹¹² Taking that at face value, my base captures between a third and three fifths of the growth, depending on how inflation is treated E (estimate). The 2026 annualised figure of about $63B includes the windfall, so it does not argue for a higher base.

Three cases

The oil prices are the ones on my Saudi Aramco page: $84 in 2027, which is the EIA’s October figure, then $76 in 2028 and $72 from 2029 in the base. The bear is $66, then $58. The bull is $100, $90, then $85. One oil deck for the whole site is the only fair way to compare the two companies. In the base the baseline cash flow grows from $59.7B to $69B by 2030, as Guyana adds its fifth and sixth ships, the Permian grows, Golden Pass ramps up and cost savings keep coming. Capital spending is $29B a year to 2030. The bear holds at $56B to $59B and cuts spending to $27B. The bull reaches $78B and spends $31B.

The base takes between a third and three fifths of the cash-flow growth in the 2030 plan, and the bull between a half and four fifths. Why not all of the plan? Because plans are made at the top of a good run, and cash flow goals at constant prices and margins assume that the margin on every business holds. The company has hit its cost target so far, with $16.9B of $20B done, and that is the part of the plan I believe most.³ Production growth and refining margins are the parts I discount.

Look at where the value sits. In the base, 50% comes after 2036. That is high but ordinary for a business with reserves, a resource base and a Permian inventory that last longer than ten years. It also means a point of discount rate matters more than a year of oil. The base is worth $118 at 9.4% and $158 at 7.4% E (estimate).

What the price needs

Of these, the discount rate line is the most telling. A rate of 6.5% with my base cash is the price. That is not absurd. It treats the share as a high-quality, long-lived stream, close to an inflation-protected bond with an equity kicker. A buyer who sees Exxon Mobil that way might accept it. I do not, because the profit swings with a price nobody controls. The oil line says the same thing a different way. The market is paying for oil near $99 for many years, or for a company that delivers its whole plan.

The price against the range

The price is 39% above my base and 9% under my bull. The margin-of-safety price is $93, where my $70 bear value equals three quarters of the price paid, so that the downside I can see is about a quarter of the price. It is 50% below the market. The share last closed below that line in October 2022.

Quality and price are separate questions. Exxon Mobil is a very good large business: it has the best cost position in its class, two top-tier growth assets and a balance sheet that survived 2020. At $187.25 that quality is already in the price, and the price also pays for a record year. For a buyer at this level it looks like a good business at a full price, one that needs oil above my base or a plan delivered in full. I do not mean the company is the problem. The share price has run ahead of my values.

Where this could be in 5 and 10 years

Value in a later year is my model rolled forward. It is the present value at that date, at 8.4%, of the owner cash still to come and the terminal value, per today’s 4.079 billion shares and in that year’s dollars. Owner cash is assumed paid out.

For the base to stand at five years, Brent has to sit near $72, the baseline cash flow has to reach about $70B by 2031, and capital spending has to stay near $29B. Owner cash is then about $40B a year E (estimate). For ten years it needs the same, and owner cash near $43B in 2036. The cases differ on three numbers: Brent from 2029 is $58, $72 and $85, the baseline reaches $59B, $69B and $78B by 2030, and capital spending is $27B, $29B and $31B.

The most likely way the base is wrong is the baseline. Every $5B a year on it moves today’s value by about $16 a share, and 2019 to 2025 shows the baseline can move $28B in six years. Every $10 off the long-run oil price takes about $19 off. The base returns 3.9% a year from today’s price. Owner cash paid out averages about 5.4% of the price a year, and the value of $155 in 2036 is below today’s price, which takes about 1.9 points a year off E (estimate). These are estimates of value, not forecasts of the share price, and the market can sit above or below value for years.

VIIThe case for the price

What most people miss

Three things cut in the company’s favour. First, flexibility. Only $8.5B of the $27B to $29B planned for 2026 is firm, and $8.0B more is committed for 2027 and later, so spending can be cut in a bad year.² Second, costs. Cash operating expenses, excluding energy and production taxes, were $44.1B in 2025 against $44.0B in 2019, while production rose by about a fifth C (calculated).² Third, the 2026 windfall came mostly from refining. Energy Products added $12.0B of adjusted profit in nine months and Upstream $5.3B, with Brent at $93 against $71 C (calculated).³¹⁷ Exxon Mobil is less of an oil price bet than it looks.

The bull case

The argument: the company has low-cost growth in two basins far from the Gulf and keeps cutting costs. Woods says in the third-quarter release: “Quarter after quarter, the evidence of a stronger business builds.”³ The December 2025 plan targets $25B more earnings and $35B more cash flow by 2030 than 2024 at constant prices, with returns above 17%, and $16.9B of $20B in structural savings is done.¹⁹³ Twenty-six analysts, whom the data provider does not name, average a target of $179.38, 4% below the price, which I can cite only secondhand.⁹ The proxy names Vanguard, BlackRock and State Street as the largest holders, and the Schedule 13G filings of 27 and 30 October came from BlackRock and Vanguard Capital Management.¹⁰²⁴²⁵ I found no filing showing a named active investor building a position.

Against reality

If oil holds at $85 from 2029 and the baseline reaches $78B by 2030, my model gives $207 and the price is possible. If the plan arrives in full and from 2027, the price is fair. Today is far from that. The baseline was $60B in 2025, the EIA expects $84 for 2027 and not $100, and the refining margin that carried 2026 was $50 a barrel in the third quarter against $18 in the fourth quarter of 2025.⁷⁵ Multiply the steps. Oil at $85 or more from 2029, 30%. The baseline reaches $78B, 40%. Capital at $31B or less, 80%. No major setback in Guyana, Qatar or Mozambique, 85%. Together 8% E (estimate). They are not independent, so I put the bull nearer 10%. The price needs a discount rate of 6.5% on my base, or oil near $99 for ten years.

What a 10x would take. Ten times $187.25 is $1,872, a market value of $7.6 trillion, more than NVIDIA, the largest company I cover, at about $5 trillion on its page. At 20 times earnings that needs net income of about $382B, against $55.7B in 2022, the best of the ten years I read, and $34.1B in nine months of 2026 C (calculated).⁴³ At Brent $150 from 2029 my model gives $284, 1.5 times the price and not ten. A tenfold gain in ten years is 26% a year. This share rose 2.2 times in the last ten years, from $83.32 in October 2016, through a war-driven oil price.¹ For a company worth three quarters of a trillion dollars I think a tenfold gain is close to impossible, and I would not build a case on it.

Where I come down

What moved me most is how much of 2026 is a refining margin and how little is oil, and the lines company free cash flow leaves out. They put owner cash near $37B to $41B in my base, about the size of the planned payout. The third-quarter profit itself did not move me, because a refining margin of $50 a barrel is not a business. Production above 5 million barrels with oil at $85, the plan delivered, or capital spending falling faster than I allow would raise my values. So would a lower discount rate, which is a judgement about how steady this profit is.

VIIIRisks, and what would change my view

The three ways this goes badly wrong are at the start of Valuation. These are the rest.

• Windfall that goes away. Nine-month adjusted earnings of $41.0B include $16.0B from Energy Products at a refining margin of $50 a barrel. If capacity returns, that falls to a fraction.³⁵ My base takes none of it forward.
• Guyana’s contract. The state shares oil with the company, so the net volume falls as the price rises. The third quarter shows it.⁵ If a new contract or tax changed the split, a large part of the growth is affected.
• Returns on capital. The company earned 9.3% in 2025 on $305.8B. The plan says above 17% by 2030.²¹⁹ If that is missed, and the company keeps spending $29B, owner cash will not rise.
• Acquisitions. The company has paid $63B in stock for Pioneer and $4.8B for Denbury.¹²² A deal at the top of the cycle would be priced off today’s earnings.
• Climate and demand. Governments could restrict oil and gas faster than I expect, and the company’s own risk factors say so.² The long-run oil price after 2030 is the input I know least.
• Share price and the payout. At $187.25 a $20B buyback retires about 2.6% of the company. If the price falls 30%, the same dollars retire more shares, but only if the company keeps the payout when profit falls.³ From 2016 to 2021 it kept the dividend but did not buy back stock.
• Reporting. The third-quarter figures are preliminary and sit in an 8-K. The 10-Q may change them. The company excludes “identified items” and timing effects from adjusted earnings, and in 2026 these were large: nine-month earnings were $34.1B against adjusted $41.0B.³
• Registrant change. The shares are now those of a Texas holding company. The business did not change, but the legal rules for holders did. I have not tried to value that.¹¹

Geopolitical risk, and what it means for the value

Exxon Mobil sells in every market but its barrels come from a few places, and several of them are in play now. The Gulf matters for Qatar’s gas, with 45.7 million tonnes a year of liquefaction capacity gross, and for Abu Dhabi’s Upper Zakum oil field.² Guyana is the subject of a border dispute with Venezuela over the 1899 award that set the land boundary, and the International Court of Justice has the case.²⁶ Kazakhstan sends its oil through a pipeline that crosses Russia.² In Mozambique the Rovuma project still needs a final investment decision. In Russia the company lost Sakhalin-1 in 2022 and took a $4.6B charge before tax.¹⁶ In 2026 the Strait of Hormuz closed, and a press report says Iranian strikes damaged two Qatari trains.⁷¹⁸

The result surprised me. A Strait closure through 2027 raises the base from $135 to $141, because oil and refining margins pay for the lost gas many times over. Damage that lasts longer, or a Stabroek stoppage, costs less than $3 a share, because one or two years of cash is a small part of a value that sits mostly after 2036. What costs more is something permanent: a lower long-run oil price or a lasting tax. A price of $62 in the long run takes the base to $116, and a permanent $4B-a-year tax takes it to $122. Governments have the bigger levers over the value, more than armies do. Who decides is in the table, and so are my odds. The odds are my judgement, with the basis given.

What is in the price: nearly all of it. At $187.25 the market is paying for oil near $99 for years or a discount rate near 6.5%, so a quick peace and a lower oil price are the risk to the price, even though they are good for the world. The war has added a year or two of cash. It has not changed my view of the business. Venezuela’s claim and the ICJ ruling are timing risks: the court case is open, Guyana’s minister said in February that it will not approve exploration near the border until it rules, and that the court could rule by the end of 2026. Both are press reports, not filings, and I cannot give a date.²⁶²⁷