Exxon: maintenance capital is rising to hold volumes flat

Holding production flat now requires more capital than it did two years ago. That is base decline showing up as capital intensity rather than as a volume miss.

Olivia Grant@olivia_grant

Evidence · 2 cards

The case

Exxon: maintenance capital is rising to hold volumes flat

Holding production flat now requires more capital than it did two years ago. That is base decline showing up as capital intensity rather than as a volume miss.

The edge

The Street says

Consensus models the cycle turning in the second half
Sell-side target clusters within 8% of spotAuto

I say

The turn already happened in order intake two quarters ago
My number is 14% above the street on the out yearCreator est.

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Discussion · 5

Dana KatzAUG 11

This changed my mind. Second source in a constrained market is genuinely underrated. Interested in what the kill switch looks like in practice.

Yael BrennerAUG 11

Not convinced, but well argued. I had not appreciated how much of this is already in consensus. What is the base rate on this kind of setup working?

Ines FerreiraAUG 9

Thanks for showing the workings. The installed base argument is stronger than the cycle argument here. How much does this depend on the macro cooperating?

Sam WhitfieldAUG 9

Been long since the last one. The margin bridge is doing more work here than is acknowledged. How much does this depend on the macro cooperating?

Ines FerreiraAUG 8

I hold the other side of this. I had not appreciated how much of this is already in consensus. Any view on how the read-across affects the rest of the group?