ExxonMobil Advances Guyana Growth With Continued FPSO Additions

Exxon Mobil Corporation XOM, a U.S.-based integrated energy giant, stands out among other industry majors for its strong upstream presence, underpinned by its advantaged assets in the Permian Basin and offshore Guyana. The majority of XOM’s earnings comes from its upstream business segment, which is expected to generate solid profits amid a favorable commodity price environment.

ExxonMobil is the largest stakeholder and operator of the Stabroek Block, offshore Guyana, with a 45% stake. The company is consistently investing in increasing production from Guyana. Its most recent development, Yellowtail, which is the fourth and the largest development in Guyana, came online ahead of schedule in the third quarter. Following the startup of Yellowtail, XOM’s production from Guyana reached approximately 875,000 gross barrels per day in the fourth quarter.

Recently, a company spokesperson told Reuters that another floating production facility, slated for installation in Guyana, has almost reached completion and is expected to arrive soon. The new floating production, storage and offloading (FPSO) vessel will be the fifth installation by XOM in Guyana. The FPSO will be used for the Uaru development, the fifth offshore project in Guyana. The vessel has a production and storage capacity of up to 250,000 barrels per day for the Uaru development. The company has highlighted that, after the Uaru development, it plans to start the sixth development in Guyana — the Whiptail project — by 2027.

The Guyana deepwater development is expected to be one of the most successful developments to date, positioning the South American nation of Guyana among the fastest-growing oil producers in the region. Guyana’s low-cost production assets, with lower emissions, support XOM’s long-term production growth and cash flow profile, enhancing profitability. The low-cost production profile of these assets enables it to maintain a competitive edge among international oil producers.

Other Industry Majors With a Low-Cost Production Profile

ConocoPhillips COP and EOG Resources, Inc. EOG are two other energy firms that boast a low-cost resource base in the shale basins of the United States.

ConocoPhillips is involved in the exploration and production of crude oil, natural gas liquids (NGLs), bitumen and natural gas. The company boasts a strong asset base in the shale basins of the United States, including the Delaware Basin, Midland Basin, Eagle Ford and Bakken shale. These assets support low-cost production, which enables ConocoPhillips to maintain its profitability and generate free cash flow even during periods of low oil prices.

EOG Resources is a leading independent exploration and production company with operations focused on the prolific acres in the United States, as well as several resource-rich international basins. EOG boasts a high-return, low-decline asset base and stands out among the low-cost producers in the United States. The company’s focus on maintaining a resilient balance sheet and lowering production costs should enable it to weather oil price volatility.

XOM’s Price Performance, Valuation & Estimates

Shares of ExxonMobil have risen 37.7% over the past year compared with the 33.6% improvement of the composite stocks belonging to the industry.

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From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 10.28X. This is above the broader industry average of 6.51X.

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The Zacks Consensus Estimate for XOM’s 2025 earnings has seen upward revisions over the past 30 days.

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XOM, COP and EOG each currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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