Now that the price of crude oil has levitated well above that magic century mark, and ExxonMobil
Hey, big spender
An ultimate key to an energy company's success lies in its capital expenditures to find, produce, and treat conventional hydrocarbons. Last year, ExxonMobil spent $21 billion on capex. This year, given increasing costs for most oilfield-related goods, services, and people, the company expects to spend more than $25 billion.
For the sake of perspective, Exxon's planned expenditures compare to an expected outlay of about $24 billion to $25 billion this year by the world's No. 2 oil company, Royal Dutch Shell
From the standpoint of the company's upstream operations successes last year, the company more than replaced its production for the year. Indeed, from a purely drilling perspective -- as opposed, for instance, to acquisitions -- the company added about two billion oil equivalent barrels. Overall, Albers noted that, even given the effects of Venezuela's expropriation of its assets during the year, the company replaced about 101% of its production.
And the downstream
With 38 interests in refineries, Exxon ranks as the world's largest refiner. When, as senior vice president Steve Simon observed, you combine that position with a status as the largest global supplier and marketer of petroleum products, "you create structural advantages that are extremely difficult to replicate."
In 2007 alone, Exxon refineries ran more than 135 crudes that individually were new to them. Of that number, 15 hadn't been processed in any of the company's facilities. And from the standpoint of growth in the number of barrels of crude that flow through the company's refineries, since 1975 its total capacity has grown by about 30,000 barrels a day every year.
A Chinese cracker
Looking at more up-to-date growth, Exxon has partnered with Saudi Aramco and China's Sinopec in a refining and chemical manufacturing venture in China's Fujian province. The venture, for which start-up is expected in 2009, will include about 750 retail stations. It'll also include a capacity tripling for an existing refinery and the construction of an 800,000-barrels-per-day steam cracker.
I could go on telling you about more of ExxonMobil's plans or deluging you with the company's numbers, but that doesn't appear sensible. I think you can grasp that we're talking about a massive and very successful worldwide entity, an entity that produced an average return on equity of 31% over the past five years.
Beyond that, with its overall scope, its operating and financial track record, and the increasing complexities involved in finding and producing of hydrocarbons, I'm convinced that it deserves a prominent spot on the watch lists of Fools with a taste for oil and gas.
For related Foolishness:
Fool contributor David Lee Smith definitely has developed a taste for oil -- the cruder, the better -- but he doesn't own shares in any of the companies mentioned. He does welcome your questions or comments. The Fool's disclosure policy is highly refined.