Exxon Mobil 2Q16 Q & A earnings call highlights
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Energy Outlook:
- Notes a lot of players in the LNG market now, built a very credible reputation with their buyers
- Sees chemicals demand growing 1% above GDP through 2040
- Expects ethylene demand to grow about 4%/year, 6-7 mln tons per year of additional capacity, equates to about 4 to 5 world-scale crackers per year
- Expects to run 10 rigs throughout 3Q16 compared to 11 rigs in 2Q16
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When asked about future M & A and what they look for:
- Co is not focusing on a specific geography or resource type, acquisition must meet fundamental quality expectations, must compete with the resources in the existing inventory, must have confidence that they can bring value to it and that it has long-term strategic value, must be accretive to returns
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When asked about cash flow sensitivity to oil prices:
- Notes a range of $40-80/barrel, in a position to maintain cash flow neutrality by next year
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When asked about Canadian wild fires & Nigeria:
- Notes 100K barrel impact combined
- Canadian fire does not impact their assets directly, shut down out of safety only
- In July, they picked up a system anomaly on the offshore export pipeline and have had an initial investigation, believe it was damaged due to third-party impact, working with the JV partner government authorities to investigate how to fix
- Shares of XOM -3% as the earnings call winds down.