Exxon CEO Says Capital Plans Hold Even If Oil Prices Drop To $50 Per Barrel

ExxonMobil Corp. (XOM) CEO Darren Woods said on Wednesday that the company will maintain its capital allocation plans even if oil prices decline to $50 a barrel.

The company’s stock edged 0.7% lower in afternoon trade. Meanwhile, U.S. West Texas Intermediate (WTI) futures maturing in July were trading at around $61.93 per barrel. WTI prices have fallen nearly 14% this year. 

“We don’t see the need to change even at a price as low as $50 a barrel,” Wood said at the company’s annual meeting, as cited by Bloomberg, noting that the company can be flexible if needed.

“For differentiated long-term value, we must invest in profitable growth and advantaged investment opportunities.”

He highlighted that ExxonMobil had stress-tested its business against “more punitive scenarios” than those currently prevailing in the market and presented the findings to its board late last year. Based on that review, Woods said the energy major will continue to invest in growth projects and return capital to shareholders, even if crude prices fall further.

Exxon’s shareholder meeting saw no qualifying resolutions for the first time in over six decades—a result Woods attributed to the company’s market performance and its resistance to what he called "harmful proposals."

At the annual meeting, ExxonMobil also announced that it has entered into exclusive negotiations with the French unit of Canadian energy group North Atlantic to divest its majority-owned French subsidiary, Esso.

The company is currently the majority shareholder in Esso, with an 82.89% stake, which it plans to divest entirely.

ExxonMobil stock has fallen 5% this year and more than 9% in the past 12 months. 

Meanwhile, the U.S. Oil Fund (USO) shares gained 1.7% in afternoon trade. USO’s stock is down 10% this year, as well as over the past 12 months. 

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