Exxon unveils low-carbon plan to power data centers; eyes $140B in Permian Basin capex

Exxon Mobil (NYSE:XOM) is designing a natural-gas fired power plant to help fuel data centers that will use carbon capture and storage equipment with the ability to capture more than 90% of its carbon emissions, The New York Times reported Wednesday.

The plant is expected to be operating within the next five years, and the company has secured land and talked to potential customers, but cost estimates for the project have not been disclosed, according to the report.

Exxon’s (XOM) facility reportedly would not connect to the electric grid, allowing for a quicker start date because it can take years to receive approval.

“We’re working with other large cap industrials to rapidly deploy a solution that would provide both high reliability and low carbon-intensity power to meet the growing demand for computing power for artificial intelligence,” CFO Kathy Mikells said Wednesday at an investor presentation.

Exxon (XOM) also unveiled plans to spend $140B in the Permian Basin region through 2030 as part of an effort to ramp up its earnings and return cash to shareholders with a focus on U.S. production.

The company said its Permian Basin spending plans will generate returns of more than 30% by 2030, driving cash returns to shareholders.

The move comes after Exxon (XOM) beat expectations for Q3 upstream production following its purchase of Pioneer Natural Resources.

Looking ahead, Exxon (XOM) said it expects to earn an additional $20B in earnings and $30B in cash flow to 2030, with a compound annual earnings growth rate of 10%, and will target $7B in cost savings; the company said its cost savings for the Pioneer deal will total $3B, which is 50% more than its previous projections.

Exxon (XOM) said it expects to spend $27B-$29B on capital projects in 2025, which will be the first full year with Pioneer included in its portfolio.