ExxonMobil (NYSE: XOM) is in an interesting position. On one hand, it is the single largest oil and natural gas producer in the U.S., with seemingly bottomless pockets and a bevvy of valuable assets from the United States to the Gulf of Mexico to Africa, and beyond. In the long-run, I would never bet against the most efficient oil major in the world, and I don't see recent developments changing anything in that regard.

On the other hand, it faces something of a crisis as oil prices remain stubbornly low, hovering around $58 as of this writing. Margins are being crimped, and profits have fallen alongside the price of crude oil and natural gas. Still, it's hard to ignore the company's resilient cash-flow and healthy capital return program. So, with such variables apparently at odds, is Exxonmobil, in fact, a "value trap?"

Too many fracking sinkholes
In recent years, ExxonmobilMobil has spent tens of billions of dollars to buy into the U.S. "shale boom," especially with its giant acquisition of XTO Energy. The wisdom of such moves might be proven in the long run, but for now those strategic investments appear ill-timed. Investors are suffering as overall profits have fallen like a rock, costs have risen. and the share price has dropped nearly 20% from their 52- week high. Such developments have also called into question Exxonmobil's well-established and dependable capital return program of massive stock buybacks and dividend hikes. Going forward, management is tempering expectations while trying to assuage investor fears of any serious threat to such shareholder "sacred cows." 

Natural gas concerns and prospects
Another wrench thrown in the works involved the other main fossil fuel in which Exxonmobil has invested heavily over the past decade: natural gas. Natural gas prices averaged $2.99 (per million Btu's) in the first quarter, compared with $4.95 in the prior comparable period -- a drop of nearly 40%. The fracking revolution has made natural gas a viable alternative to crude in many respects, particularly given its cleaner-burning nature, its astonishing abundance across large sections of the globe and the relative ease of access to vast reserves. Throw in the fact that regulations are likely to favor cleaner-burning fossil fuels and other alternatives, and Exxonmobil's strategy becomes clear.

Recent results might cloud the long-term picture
While Exxonmobil's earnings results will hardly shine with crude prices anywhere south of $65 per barrel, downstream earnings represented the biggest boon to the top and bottom lines last quarter, roughly doubling from $813 million a year ago to $1.67 billion thanks to significantly higher refining margins. The chemical component stayed basically flat-lined, reporting profits of $982 million. Given this and the sheer leverage the company has with its partners, Exxonmobil remains far better positioned than peers in refining and chemicals given its higher-quality assets and more sound integration overall.

Drilling down into the actual balance sheet and income statement, the difficulties over the past quarter become glaringly obvious. Net income dropped from $9.1 billion to $4.94 billion, earnings per share fell from $2.10 to $1.17 (which would have been worse without the significant buybacks to shrink overall share count), and overall top-line revenue plunged from $106.7 billion to $67.6 billion (nearly a 37% drop). Despite all of this, Exxonmobil's free cash flow remained robust at a healthy $7.8 billion, reflecting the company's incredible profitability even during some of the worst market conditions in decades.

On a price to earnings basis, Exxonmobil is not particularly cheap, especially when compared to its typical valuation. In fact, the company's TTM (trailing twelve month) P/E ratio is 12.5, compared to its 5-year average of 11.5; the story is similar with P/CF as the current ratio reflects a 9.3 multiple, compared to a 5-year average of 11.7. Other metrics, however, indicate a better value for the prospective investor. The P/B is 2.0 compared to its 5-year average of 2.5, and its dividend yield is 3.4% compared to its average of 2.2.

My Foolish take
Quite simply, Exxonmobil is a long-term investor's dream, but one must be willing to ride the ups and downs as global oil stock fluctuates, OPEC remains obstinate in its production policies, and fracking is less lucrative in than the halcyon days of 2010-2013. This stock will require some patience, to be sure, to see significant returns, but a current dividend yield of 3.5% plus ample share buybacks pay investors while they wait for the share price to rebound. If one thing has proven to be incredibly accretive to shareholder value over the long-haul, it's a strong capital return program that is properly managed for sustainable returns. Exxonmobil has been an exemplar of such policies, and I don't see that changing anytime soon.