Is ExxonMobil's Plan for $35 Oil Breakeven Going to be a Game Changer?

Core Insights - Exxon Mobil Corporation (XOM) aims to reduce its breakeven costs to $35 per barrel by 2027 and $30 per barrel by 2030, which could significantly enhance profitability, especially in its upstream business [1][6] - Achieving these lower breakeven costs would allow ExxonMobil to remain profitable even during significant drops in crude oil prices, as demonstrated during the 2020 oil price collapse [2][6] - The current share price of ExxonMobil has decreased by 4.4% over the past year, which is slightly better than the 6.3% decline of the broader industry [5][6] Upstream Operations - Companies like Chevron Corporation (CVX) and EOG Resources Inc. (EOG) also benefit from low breakeven costs, particularly in the Permian basin, where breakeven prices are well below $40 per barrel [3] - Chevron has focused 80% of its development activities in the Delaware basin and plans to increase this to 85%, emphasizing low breakeven-cost operations [4] - EOG has indicated that it can manage its planned spending even if oil prices remain in the low $50 per barrel range, showcasing financial resilience [4] Valuation Metrics - ExxonMobil's current trailing 12-month enterprise value to EBITDA (EV/EBITDA) ratio is 6.45x, which is above the industry average of 4.05x [7] - The Zacks Consensus Estimate for ExxonMobil's earnings in 2025 has been revised downward recently, indicating potential concerns about future performance [8]