Provide a general description of the publicly traded company you chose.
· The company I choose for this assignment is ExxonMobil. ExxonMobil was incorporated on August 5, 1882 in New Jersey as Standard Oil Company of New Jersey. As an exchange for the stock and properties by the trustees of Standard Oil Trust of the Standard Oil Company (Ohio) which was located in New Jersey. Then changed the name to Standard Oil Company on March 19, 1892. The name changed again to Exxon Corp. on November 1, 1972. The name ExxonMobil was adopted on November 30, 1999.
· ExxonMobil, is the largest publicly traded international oil and gas company, which uses its technology and its innovation to help meet the world’s growing needs. ExxonMobil holds an industry-leading inventory of resources and is one of the world’s largest integrated refiners, chemical manufactures, marketers of the petroleum products.
ExxonMobil, is an American multinational oil and gas corporation which is headquartered in Irving, Texas.
· ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world’s oil and about 2% of the world’s energy.
· ExxonMobil is organized into a number of global operating divisions. These have been grouped into 3 categories for a reference purpose, even though the company has several ancillary divisions, such as Coal & Minerals, which these are stand alone. It owns hundreds of smaller subsidiaries such as the Imperial Oil Limited which 69.6% ownership is in Canada and Sea River Maritime which is a petroleum shipping company.
· Chemical division based in Houston, Texas.
Describe the challenges facing the company in the chosen category of analysis.
· One major challenge ExxonMobil faces is the oil prices. The oil will continue to go up and down there is that Exxon can do about that it. ExxonMobil has had to use the downturn to invest in a new asset that will hopefully help enhance its flexibility in a low-oil-priced world.
· Another challenge is maintain their reserves, which means that oil companies have a set amount of oil and natural gas in the ground. That meaning each time a barrel is pulled up that is one less barrel for the future. This is one main reason that the oil companies is always looking for new sources of oil. The replacement numbers can go up and down. The main problem is that the low oil prices make it harder to find profitable oil that can replace what has already been pulled up.
· One more challenge would be the shifting of gears which means that the Permian acquisition has become notable because it has indicated a shift in the companies way of thinking. ExxonMobil has always focused on very large and expensive projects that would take years to complete. Now, what Permian suggests is that the oil giant could be looking to increase its flexibility by increasing its exposure to onshore U.S. drilling, which would be an easier to ramp up and down as the oil prices would change. At the same time the onshore space will not offer the same returns as their large projects. This could not be a bad thing if ExxonMobil is looking for a stable dividend paying business because the returns would be more stable over time.
Assess its current performance in your chosen category of analysis.
· ExxonMobil had a revenue of $237,162 million by the end of December 2017. The sales and operating revenue declined from 2015 to 2016 and then increased a small margin from 2016 through 2017. During the half of 2018 ExxonMobil had a revenue of $65,436 million up to March 31, 2018.
Forecast its projected performance in your chosen category of analysis.
· ExxonMobil Corporation Analyst Forecast Performance in the next five years is expected to grow earnings at an average annual rate of 13.72%. For this year the forecasted earnings will increase up to 35.93% over the last year. The expected earnings for next year of 15.6% over this year’s forecasted earnings.
Evaluate impending opportunities or challenges that result from your environmental scan.
· Managing through the cycle: Facts is everything we do contains elements of risk. To maintain this we must understand the risks and to mitigate them. But then only when we are able to do this effectively because we are in that position to be able to make wise and a disciplined decisions.
· Invaluable Role of Technology: In every part of a business technology is an improving performance, from unlocking opportunities in the frontier basins to improving the profitability of the core assets.
· Maintain a Long Term Perspective: Nothing happens overnight. The most successful businesses are the ones that prepare and plan for the long term.
· Making Sure You’re Doing the Right Thing: To make a business more effective, it needs to be focused on its integrity and its integrity is the foundation.