Exxon Mobil Corporation (NYSE: XOM) Is Set To Invest In the US on Tax Cuts
Exxon Mobil Corporation (NYSE: XOM) recently announced that it is going to invest $50 billion in its US operations following the passing of the tax reform bill and a favorable operating environment. The company’s CEO Darren Woods stated that the funds would be used to expand output in New Mexico, Texas and other areas within the country.
Exxon Mobil recently announced that it will invest $50 billion in the US.
The company is set to invest significantly in the Permian Basin shale oilfields.
The company is operating in a favorable environment.
The oil major’s announcement follows similar moves by other major US companies such as Apple Inc. (NASDAQ: AAPL) and Wal-Mart Stores Inc (NYSE: WMT), which have increased their investments in the US while at the same time hiking the salaries of their employees.
The company also announced recently that it plans to increase its production capacity in the Permian Basin to 600,000 barrels of oil equivalent per day by 2025. The company will not only invest in its production capabilities, but will also build the necessary infrastructure that will allow it to transport its products to different markets.
The Permian Basin is one of the largest US shale oil fields ever discovered and has been the epicenter of the resurgence in the US shale oil production in recent years. The higher global oil prices are likely to continue boosting US shale oil production given the rising demand for oil across the globe, which could cause the company’s stock to rally higher.
Earlier this month, the company also announced a major oil discovery in the deep waters off Guyana, which could add about 200,000 barrels of oil equivalent to the company’s production capacity in the next few years. This discovery is likely to contribute significantly to the company’s production capacity in future, which bodes well for the company’s shareholders.
Exxon Mobil is undertaking numerous capital investments that are likely to boost the company’s top and bottom line in future. Despite the fact that XOM has traded sideways for the past five years, it cumulative losses are a minimal 3%, which is much better compared to the United States Oil Fund LP (ETF) (NYSEARCA: USO) that lost 62% over the same period.
However, it is not enough to know that a stock is likely to head higher, or lower this year. As an investor or trader, it is important to time your entry and exit points accurately in order to minimize risk and maximize your profit potential.
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