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Business, Finance, Occupation & Industry

Exxon Mobil Must Pay $236 Million in NH Pollution Case

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By The Associated Press

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By LYNNE TUOHY

CONCORD, N.H. (AP) – Exxon Mobil Corp. (XOM) was found liable Tuesday in a long-running lawsuit over groundwater contamination caused by the gasoline additive MTBE, and the jury ordered the oil giant to pay $236 million to New Hampshire to clean it up.

The jurors reached their verdicts in less than 90 minutes, after sitting through nearly three months of testimony in the longest state trial in New Hampshire history.

The panel awarded the state the $236 million it was seeking to monitor and remediate groundwater contaminated by MTBE. The chemical was added to gasoline to reduce smog but was found to travel farther and faster in groundwater than gasoline without the additive.

“We appreciate the jurors’ service during this long trial, but erroneous rulings prevented them from hearing all the evidence and deprived us of a fair trial,” said Exxon Mobil lawyer David Lender.

Jurors found that Exxon Mobil was negligent in adding MTBE to its gasoline and that it was a defective product. They also found Exxon Mobil liable for failing to warn distributors and consumers about its contaminating characteristics.

The jury determined that the hazards of using MTBE gasoline were not obvious to state officials, who opted into the reformulated gasoline program in 1991 to help reduce smog in the state’s four southernmost counties.

Lawyers for Exxon Mobil argued the company used MTBE to meet federal Clean Air Act mandates to reduce air pollution and should not be held liable for sites contaminated by unnamed third parties, such as junk yard owners and independent gas station owners who allowed gas containing MTBE to get into the ground.

The state says more than 600 wells in New Hampshire are known to be contaminated with MTBE and an expert witness estimated the number could exceed 5,000.

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Jurors had more than 400 exhibits to sift through, including memos and reports dating back decades. Those memos included some dating back to 1984 in which Exxon Mobil researchers warned against using MTBE gasoline.

Jessica Grant, representing the state, said they were pleased the jury held Exxon Mobil accountable for widespread ground water contamination.

“The finding of Exxon’s negligence is particularly important because it shows the jury understood that this problem could have been avoided,” she said.

Jurors, via court personnel, said they did not want to talk to the media about their verdict.

Irving, Texas-based Exxon Mobil was the sole remaining defendant of the 26 the state sued in 2003. Citgo was a co-defendant when the trial began in January, but it began settlement negotiations with the state and withdrew from the trial. Citgo ultimately settled for $16 million, bringing the total the state has collected in MTBE settlement money to $136 million.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

ExxonMobil Stock: 2 Keys to Higher Returns

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By Matt DiLallo, The Motley Fool

XOM Chart

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ExxonMobil‘s stock is one of the most widely held securities in the investing world. That might have something to do with the fact it’s one of the largest publicly traded companies in the world. However, there’s a reason investors keep pouring money into the stock: It’s been a steady performer for decades.

In fact, the company has vastly outperformed the S&P 500 over the past decade as you can see from the following chart:

XOM data by YCharts

While past performance is nice to see, it tells us nothing of how ExxonMobil’s stock will perform in the future. For investors interested in the stock there are two areas that you need to watch carefully. If ExxonMobil can continue to excel in these areas, then I don’t see any reason why its stock can’t continue to outperform.

Allocation of capital
ExxonMobil, thanks to high oil prices, generates billions of dollars of annual cash flow. While that’s a good problem to have, the company does need to spend those dollars wisely. While the company spends billions to invest in new oil and gas projects, it also sends a lot of cash back to its investors. The company pays a relatively small dividend, currently around 2.5%, however, where the company really excels is a buying back its own stock. Over the past decade ExxonMobil has bought back more over $200 billion in shares.

That’s important for investors because it means that you’d own a larger portion of the overall company by holding on to your shares. For example, ExxonMobil has only grown its oil and gas production by about 1% annually over the past decade. However, buy repurchasing all that stock, ExxonMobil was actually able to grow its production per share by 48% over that same time frame. That’s a buyback with a real impact and one that few companies can match. 

That’s not the only area where ExxonMobil excels. The company’s return on capital deployed has averaged just under 25% since 2008. That smashes the returns’ of Chevron and Royal Dutch Shell which averaged 20% and 15%, respectively, over the same time frame. ExxonMobil does this by choosing to invest in the projects that can deliver the greatest overall rates of returns. If the company can keep up this pace, its stock should continue to rise.

Growing production
If there is a rub against ExxonMobil, its the fact that its returns-focused business has delivered only meager production growth over the past decade. However, growth is expected to accelerate in the decade ahead. After a projected 1% decline in production this year, the company expects to grow production by a 2%-3% annual clip through 2017. More importantly, this growth will focus on higher margin oil and natural gas liquids projects.

I will point out that this production growth is a bit lower than some of its peers. ConocoPhillips for example is expected …read more
Source: FULL ARTICLE at DailyFinance

Science & Technology

U.S. Crude Oil Inventories Rise to Highest Level Since 1990

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By Reuters

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Damian Dovarganes/AP

By Robert Gibbons

NEW YORK — Oil prices fell more than 2 percent on Wednesday as U.S. crude oil inventories grew to their highest level since 1990 and weak economic data stoked worries about U.S. energy demand.

U.S. crude stocks rose 2.71 million barrels last week, the Energy Information Administration said in its weekly report.

The rise was slightly more than the build of 2.2 million barrels expected in a Reuters survey of analysts and put U.S. commercial inventories at 388.62 million barrels, the most since 1990 and close to the record 391.9 million barrels reached in 1982, the year the EIA started tracking inventories.

“The report is somewhat bearish given the build in crude oil inventories and modest decline in gasoline inventories, which are the focus of the market,” said John Kilduff, partner at Again Capital LLC in New York.

“The rise in the refinery utilization to above 86 percent also signals further easing of the concerns over refined product inventories,” Kilduff said.

U.S. RBOB gasoline futures fell 3 percent, more than 9 cents, after or dropping 6 cents on Tuesday, as the EIA said gasoline stocks fell 572,000 barrels, less than expected and much less than the drop of 5 million barrels reported late on Tuesday by the American Petroleum Institute.

Brent crude was down $2.72 at $107.97 a barrel at 12:52 p.m. EDT, having fallen as low as $107.78.

U.S. crude was down $2.19 at $95 a barrel, having fallen to $94.89, just above the 50-day moving average at $94.64. Brent’s premium to U.S. crude fell back below $13 a barrel on Wednesday, after it reached $14.66 on Tuesday.

The spread between the two contracts had been widened because of expectations that crude stocks at the Cushing, Okla., hub, delivery point for the U.S. crude contract, would be increasing after Exxon Mobil Corp. (XOM) shut its Pegasus pipeline on Friday.

The pipeline moves crude oil from Illinois to the refinery-rich Texas Gulf Coast and a prolonged shut down would curb efforts to relieve the glut of crude oil in the Midwest.

Economic Concerns

Crude stocks at Cushing fell 287,000 barrels in the week to last Friday, the EIA report said.

With the North American heating fuel season waning and crude futures sliding, U.S. heating oil futures, the benchmark distillate contract, also fell and pushed below the 50-day and 100-day moving averages, technical levels monitored by chart watching analysts and traders.

Total distillate stocks fell 2.27 million barrels last week, the EIA said, more than expected, but the inventory drop and data showing demand over the previous four weeks was up 5.5 percent from the year-ago period didn’t prevent heating oil’s price slide.

U.S. companies hired at the weakest pace in five …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Rosneft, Exxon Mobil Broaden Arctic Shelf Joint Venture

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OGARYOVO, Russia–U.S. oil and gas conglomerate Exxon Mobil Corp. (XOM) and Russia’s OAO Rosneft (ROSN.RS) signed a deal Wednesday to broaden their existing joint venture by adding seven more licenses to develop hydrocarbon resources on Russia’s Arctic shelf, Exxon Mobil’s Deputy Chief Executive Stephen Greenlee told journalists. …read more
Source: FULL ARTICLE at Fox Business Headlines

Business, Finance, Occupation & Industry

See How Exxon Mobil Corp. Ranks Among Analysts' Top Dow 30 Picks

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By DividendChannel.com A study of analyst recommendations at the major brokerages shows that Exxon Mobil Corp. (NYSE: XOM) is the #19 broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel. Within the broader S&P 500, when components were ranked in terms of analyst favorites, XOM claims the #268 spot.
Source: FULL ARTICLE at Forbes Markets