Exxon Mobil Faces $236M Fine - Analyst Blog
10 Aprile 2013 - 7:43PM
Zacks
Exxon Mobil Corp (XOM) was directed by a jury
ruling to pay $236 million to New Hampshire to clean groundwater
contamination caused by the gasoline additive Methyl Tertiary Butyl
Ether (MTBE). Exxon Mobil added MTBE to gasoline to reduce
smog.
The ghost of MTBE contamination seems to haunt Exxon Mobil big
time. Earlier, in 2009, the energy behemoth paid $105 million in
fine to the New York City Water District.
However, the company was able to score one brownie point by
reducing the original jury verdict of an $816 million fine to $236
million or 28.9% of the original. The reduced quantum of damages
reflect Exxon's market share of gasoline sold in the state between
1988 and 2005.
Exxon Mobil is the world’s largest publicly traded oil company,
engaged in oil and natural gas exploration and production,
petroleum products refining and marketing, chemicals manufacture,
and other energy-related businesses. Approximately 83% of Exxon
Mobil’s earnings come from its operations outside the U.S.
Exxon Mobil is one of the world’s best-run integrated oil company
given its track record of superior returns on capital employed. The
energy giant has long been a core holding for investors seeking a
defensive name with continued dividend growth. Exxon Mobil is
fairly active in its investment program. The company plans to spend
about $185 billion over the next five years, up 29% from the last
five-year period.
The capital expenditure covers as many as 21 important oil and gas
projects currently under the anvil and are estimated to accumulate
over 1 million net oil-equivalent barrels per day by 2016. It
includes the Kearl Oil Sands development project in Canada, four in
West Africa and Kashagan Phase 1 in Kazakhstan.
Exxon is also engaged in a large liquefied natural gas project
in Papua New Guinea, which is expected to begin deliveries in 2014.
It will further unearth more oil from the development of Hebron oil
field offshore the Canadian province of Newfoundland and Labrador.
The development will help in recovering over 700 million barrels of
oil and the platform is expected to yield its first oil towards the
end of 2017.
Exxon Mobil holds a Zacks Rank #3 (Hold). However, the Zacks Ranked
#2 stocks of Continental Resources, Inc. (CLR),
Chesapeake Energy Corp (CHK) and EPL Oil
& Gas, Inc. (EPL) are expected to outperform the
market over the next few months.
CHESAPEAKE ENGY (CHK): Free Stock Analysis Report
CONTL RESOURCES (CLR): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
EXXON MOBIL CRP (XOM): Free Stock Analysis Report
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