ExxonMobil (NYSE: XOM) is promising tech-like exponential growth
When it comes to oil companies, ExxonMobil (NYSE: XOM) has always been big, with its origin dating all the way back to the original Standard Oil that dominated the Gilded Age. It’s been outperforming peers in the more recent era and is now promising investors something quite rare for a mature industry: exponential growth.
ExxonMobil, already the largest American oil company, unveiled a strategic plan earlier this month and said it would grow earnings at a compound rate of 10% through 2030; that will soon result in additional profit of $20 billion, and the company plans to get there with a combination of structural cost savings, increased production and a declining capex reinvestment rate.
“Scale is vital. It differentiates us,” CEO Darren Woods told investors. “It makes our technology investments affordable by leveraging the benefits across a very large base of operations.” In five years’ time, nearly 60% of total output will come from what the company says are advantaged assets primarily located in Texas’ Permian Basin and Guyana, where a massive find is quickly ramping up production that will eventually reach 1.3 million barrels of oil a day.
“Our earnings, cash flow, and return on capital employed will far exceed the results our competitors can deliver and provide a strong foundation for growing shareholder value far beyond what industry or our company has historically delivered,” Woods continued. The company plans to repurchase $20 billion of shares in both 2025 and 2026, returning capital to shareholders on top of regular dividends in a more tax-friendly manner.
Indeed, ExxonMobil has outperformed all its Big Oil peers, with its shares gaining 55% over the past five years. In the last 12 months, the company’s stock is up 6.7%. Chevron (NYSE: CVX) has declined 1.8% over the same period, while Shell PLC (CBOE: SHEL) fell 4.2%. Morningstar analyst Allen Good said in a research note last week that ExxonMobil is distinguishing itself from peers with its plans to increase spending to ramp up output. That should all add to the bottom line, as the US Energy Information Administration is expecting oil prices to remain close to current levels and average $74 a barrel next year. West Texas Intermediate (NYMEX: CLG5), a standard benchmark for US oil, is currently trading at $70.58.
Besides the expanding production, CEO Woods hinted at the technological progress underpinning efficiency gains when analysts asked him about the company’s growing use of AI to streamline operations across the vertically integrated firm. “We have been aligning all the data that we have across the company to a single structure,” he replied, noting rising savings on maintenance and shorter turnaround times. “For the first time in the corporation’s history, we can mine, process all the data coming across all of our businesses.”
ExxonMobil is leveraging its immense scale with technological advancements to redefine what’s possible in an industry more than a century old. While oil companies are often valued for predictable dividends, the company is now refining those steady returns with the promise of exponential growth. That’s a combination that could ensure its dominance and keep the black gold flowing for decades to come.
