Earnings Call Insights: Exxon Mobil Corporation (XOM) Q4 2025
Management View
- CEO Darren Woods highlighted that “2025 was a year of exceptional execution and technology-driven differentiation,” emphasizing that ExxonMobil delivered on all 10 key 2025 projects and has “built a higher return, lower cost technology-led company.” Woods stated, “We’ve already achieved our 2030 emission reduction plans for GHG emissions and flaring intensity,” and, as of 2025, “reduced our corporate GHG intensity by more than 20%, reduced upstream GHG intensity by more than 40% and reduced corporate flaring intensity by more than 60%.”
- Woods noted upstream production averaged 4.7 million oil-equivalent barrels per day, with unit earnings more than double those in 2019 on a constant price basis. He affirmed, “We successfully delivered all 10 key 2025 projects further strengthening our portfolio and positioning us for long-term profitable growth.”
- The CEO stated, “Production from advantaged assets, including the Permian, Guyana and LNG continues to grow,” and projected that these assets “will make up roughly 65% of total production by 2030.”
- Woods shared that in the Permian, “We delivered a new production record in the fourth quarter, 1.8 million oil-equivalent barrels per day, driving the highest annual company production in over 40 years.” Technology deployment is central, with lightweight proppant in 25% of wells in 2025 and an expectation to reach 50% by the end of 2026.
- The company completed $20 billion in share repurchases during the year, retiring shares equivalent to one third of those issued during the Pioneer transaction.
- Woods highlighted technological advances, including the scaling of Proxxima systems and the exceptional performance of the advanced battery anode graphite program.
- CFO Kathryn Mikells stated, “Our captured savings is greater than all other IOC savings combined over the same period,” adding that cost reductions are driving “industry-leading earnings and cash flow even in periods of lower commodity prices.”
Outlook
- Woods stated, “Our transformed company will continue to build on this success in 2026 with higher structural earnings power, stronger mix, lower breakevens and a portfolio designed to perform across commodity cycles.”
- The company expects Permian production to show “significant improvement going into 2026 versus 2025 on an annual basis,” with an annual increase of about 200,000 oil-equivalent barrels per day year-over-year, according to Mikells.
- Woods expects to “exceed 2.5 million oil-equivalent barrels a day beyond 2030” in the Permian.
- The company projects that “advantaged assets” will constitute approximately 65% of total production by 2030.
Financial Results
- Woods reported, “Over the past 5 years, our annualized shareholder return of 29% has led the industry, supported by $150 billion of distributions to shareholders during that period.”
- The company continues to deliver “industry-leading earnings power, stronger cash flow potential and more profitable barrels and products.”
- ExxonMobil achieved “the highest annual company production in over 40 years at 4.7 million oil-equivalent barrels per day.”
- Structural cost savings reached $15 billion through 2025, with Mikells stating, “That’s more than any of our competitors combined.”
- The company executed $20 billion in share repurchases, significantly reducing the dilutive impacts of the Pioneer acquisition.
Q&A
- Devin McDermott, Morgan Stanley, asked about ExxonMobil’s strategy in Guyana given the force majeure and upcoming block expiry. Woods responded, “We still think there’s opportunity in that space to explore in the block that we can currently access,” pointing to the International Court of Justice ruling as a critical milestone for the disputed area.
- Neil Mehta, Goldman Sachs, inquired about Permian production cadence and the impact of lightweight proppant. Woods cautioned against extrapolating quarterly results and emphasized long-term improvements, saying, “We’re still very focused on bringing these technologies to bear in our Cube design focused on maximum recovery and doing it at a lower cost.”
- Doug Leggate, Wolfe Research, asked about potential upside from reentering markets like Libya, Iraq, and Venezuela. Woods explained, “We’re getting an opportunity to look at a number of these locations and start working with them…I do think there will be some upside out there.” On Venezuela, Woods said, “Given the current fiscal structures in place: legal, that you couldn’t invest, but that there was opportunities to address that.”
- Bob Brackett, Bernstein, discussed asset portfolio refreshment. Woods stated, “The advantaged assets are — the advantage derives from what we bring to the development of those assets… that’s not going to change for us.”
- Arun Jayaram, JPMorgan, focused on LNG projects. Woods said, “My expectation is with Mozambique, we’ll see something here as we move through this year, probably on the back half of the year with respect to an FID if things go, kind of, to plan.”
- Wei Jiang, Barclays, inquired about the data system transformation. Woods detailed, “That model and that discipline is going to underpin this new ERP system, one data construct for the entire corporation, one data set, one set of nomenclatures.” Mikells added, “We’re going to have 97% fewer profit centers. 70% fewer cost centers.”
- Sam Margolin, Wells Fargo, pursued the battery business. Woods described, “Our technology organization, developed a molecule that has properties that really lend themselves to battery applications that result in these types of performance, step changes in performance with batteries.”
Sentiment Analysis
- Analysts expressed positive recognition of ExxonMobil’s technology execution, but several questions focused on the durability of growth in Guyana and the Permian, as well as the scalability of technological advantages and potential new market entries. Questions regarding block expiries, force majeure, and asset divestitures indicated underlying questions about long-term growth and risk.
- Management’s tone in prepared remarks was confident and forward-looking, with Woods emphasizing transformation, industry leadership, and long-term strategy. In the Q&A, Woods maintained a measured optimism, directly addressing risks and uncertainties but reiterating confidence: “We’re pretty optimistic.”
- Compared to the previous quarter, management’s tone remained confident, but the Q&A featured more probing on future upside from portfolio refreshment and asset expansion, reflecting heightened analyst attention to future growth drivers and risk factors.
Quarter-over-Quarter Comparison
- The current quarter highlighted the completion of all 10 key 2025 projects and the achievement of previously stated emissions targets. In contrast to Q3, discussion shifted more to future upside from possible reentry into markets like Venezuela, Libya, and Iraq and the scaling of technology across the portfolio.
- Management continued to focus on technology and cost leadership, but this quarter included more emphasis on enterprise-wide digital transformation and its projected operational impact.
- Analysts in both quarters pressed for details on production growth and technology scalability, though current questions more frequently addressed the longevity of advantaged assets and opportunities for further expansion.
- Key metrics such as Permian production and structural cost savings were reiterated as major strengths, but this quarter added more narrative around divestitures and portfolio high-grading.
Risks and Concerns
- Woods acknowledged geopolitical risks in Guyana, referencing the ongoing border dispute with Venezuela and its implications for the Stabroek block.
- Management identified the challenge of bringing new markets online, particularly where fiscal regimes and legal infrastructure are not yet conducive to investment.
- The company cited continued supply-side margin pressure in Chemicals despite strong demand, with Woods noting, “there continues to be a lot of capacity that comes on that expresses the margin.”
- Analysts raised concerns about underlying base decline rates in the upstream and the need for ongoing technological improvement to offset depletion, though management did not provide a specific decline rate figure.
Final Takeaway
ExxonMobil’s fourth quarter 2025 call underscored the strength of its technology-led transformation, with record production in the Permian, expansion of advantaged assets, and significant progress in digital and operational efficiency. Management’s disciplined portfolio strategy, focus on scalable technology deployment, and ongoing cost leadership position the company for continued growth and shareholder value creation, even as it navigates geopolitical uncertainties and evolving market dynamics.