Lots of people were a little shocked when Exxonmobil (NYSE:XOM) CEO Rex Tillerson said at the company's Analyst Day meeting that people should get used to the idea that oil prices could remain low for a while. Normally, someone in Mr. Tillerson's position would almost cringe when saying such a thing; but his presentation of that prognostication seemed almost like he was stating a well-known fact. 

Truth is, the company has been almost unknowingly preparing for this very sort of event since 2013, and investors who have followed its progress during the past few years would know that. Let's take a look at why the company has been prepping itself for a moment just like this years in advance without even realizing it.

We knew it all along
Traveling all the way back to Exxonmobil's Analyst meeting back in 2013, one thing that was brought up was the fact that the company was expecting that total capital expenditures for fiscal year 2013 were going to peak, and spending afterwards was going to diminish all the way to 2017 as several big-ticket projects were going to come online. The big push back then wasn't necessarily a concern of low oil prices, but instead an acknowledgement that it had been a little overzealous on budgeting new projects, and wanted to start putting more of that cash flow back into the hands of shareholders. 

Since that time, we have seen that very scenario play out. In 2013 the company's total capital expenditures were about $41 billion including a $3.1 billion acquisition. Since then, the company's expenditures have been on a slow decline as many of those major capital projects have been brought online.

Source: Exxonmobil Investor Presentation.

With close to 1.3 million barrels per day of new production sources coming online between 2013 and 2017, the company estimates that it will net in an overall production increase of 300,000 barrels per day -- got to account for that natural well decline -- to 4.3 million bpd. 

Getting scared and spending less?
The immediate conclusion that some will make when seeing the future budget for Exxonmobil is that it's taking Mr. Tillerson's message to heart, and spending less in the next couple of years by bringing growth plans to a grinding halt. That isn't necessarily the truth. According to what Mr. Tillerson said at the recent Analyst Day conference, the major reductions could come more from putting pressure on its suppliers and contractors to reduce costs.

I do want to emphasize that this does not reflect a change to our long-term investment approach. We're capturing cost savings and we expect further bottom-of-cycle efficiencies, particularly in rig rates. We expect lower prices for commodities like steel and other raw materials, and we expect reduced contractor fees. Our lower CapEx outlook also includes an appropriate reexamination of our opportunity set and tactically resequencing some of our FID choices consistent with efforts to improve the specific terms and conditions as well as optimize the development plans in this environment.

In short by selectively investing through the cycle, we continue to be positioned to capture market savings and consistently deliver better financial returns. We'll keep a close eye on our cash and prudently utilize our balance sheet to fund attractive investments.

Exxonmobil isn't the only oil and gas producer to have this idea in mind. In fact, some independent oil and gas producers here in the U.S. have even said they will not spend another dime on new development until contractor costs come down, as well. 

Exxonmobil was already looking hard at the options within its portfolio that make sense at $40-$60 per-barrel today. If the company were to see significant cost reductions on materials and services, it should be able to make a few more projects economical within that price range. Even though the company expects to spend less money during the next few years, it doesn't expect to see a major decline in production growth, or a severe reduction in reserves.

What a Fool believes
Before anyone overreacts to the statements that Rex Tillerson said at this recent analyst meeting, just know that Exxonmobil -- and many other members of the Big Oil community -- has been anticipating a decline in capital spending for the past several years, and it's not a knee-jerk reaction to the recent decline in oil prices. Exxonmobil has a reputation of spending on development through the good times and the lean times, and the possibility that oil prices could remain low for a couple of years isn't going to change that.