ExxonMobil (XOM -0.24%) reaffirmed its plan to spend between $30 billion and $35 billion per year through 2025 on capital projects, including up to $33 billion in 2020. That confirmation comes even though the energy markets have weakened considerably this year due to the COVID-19 coronavirus outbreak. The price of oil has plunged 20% in 2020, while natural gas is down to levels not seen since the 1990s.
Speaking at the company's annual investor day meeting, CEO Darren Wood stated that Exxon is "mindful of the current market environment." However, Woods said that Exxon plans to maintain its current strategy of "leaning into this market when others have pulled back."
Image source: Getty Images.
Exxon intends to use "the strength of our balance sheet to invest through the cycle," according to Woods. As such, it will outspend its cash flow when necessary to maintain its investment pace while also continuing to increase its dividend as it has for the last 37 consecutive years. It also aims to sell $15 billion in assets to help finance its investment plan.
While Exxon isn't making any changes to its planned investment level, it is adjusting its development plan. Most notably, it will operate at a reduced pace in the Permian Basin over the next two years compared to its previous outlook. However, it still expects to produce more than 1 million barrels of oil equivalent per day from the region by 2024.
Exxon fully believes that energy demand will grow in the coming years. That's why it's taking advantage of the current environment to invest while costs are lower so that it can cash in on more favorable future market conditions.
