Exxon Mobil Has Solid Week on Iraq Projects, Improving Macro Sentiment

Exxon Mobil (NYSE:XOM) saw a stable week as its stock traded around the $78 level throughout while our pre-earnings price estimate for the company remains stable at $93 which implies a 18% premium over its current market price. The industry received positive news as independent crude oil and natural gas exploration and production firm Nobel Energy posted earnings that beat market estimates. ^[1]

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Exxon’s activity in Iraq received a boost earlier this week as the Iraqi government agreed to a multi-billion dollar oilfield water injection plant to boost production rates after months of delay due to disagreements over costs. ^[2] Exxon has been selected to lead the effort to build the plant on the behalf of major oil corporation firms with operations in the U.S. including BP (NYSE:BP), Russian Lukoil and Eni from Italy. The common water injection system is required to boost production rates in Iraq’s giant southern field.

A recent report quoting Thamer Ghadhban, one of the top advisers to Iraq’s Prime Minister,  pegged Exxon’s costs to develop the ‘supergiant’ West Qurna I at $50 billion. ^[3] We will look to cover the impact of Iraqi operations on Exxon’s earnings in the future.

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1. Noble Energy Inc. Earnings Cheat Sheet: Earnings Higher Than Expected, Wall Street Cheat Sheet [↩]
2. Iraq, And Oil Firms Including Exxon Mobil Corporation Agree To Build Oil Field Water Injection Plant-DJ, Dow Jones [↩]
3. Exxon Mobil Corporation, BP plc And Eni S.p.A. Investing $100 Billion To Develop Three Iraqi Fields-DJ, Dow Jones [↩]