Exxon Mobil Corporation engages in the exploration, production, transportation, and sale of crude oil and natural gas. It also engages in the manufacture, transportation, and sale of petroleum products and petrochemicals, as well as participates in electric power generation. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. Exxon Mobil also has interests in electric power generation facilities. In addition, it holds license to explore gas in the Gorgon liquefied natural gas project for domestic supply. The company operates in the United States, Canada, Europe, Africa, Asia-Pacific, the Middle East, Russia/Caspian region, and South America. Exxon Mobil was founded in 1870. The company was formerly known as Exxon Corporation and changed its name to Exxon Mobil Corporation in 1999. Exxon Mobil is based in Irving, Texas

Energy Industry Analysis

WikiWealth.com Industry Description: The energy industry is a generic term for all of the industries involved in the production and sale of energy, including fuel extraction, manufacturing, refining and distribution. Modern society consumes large amounts of fuel, and the energy industry is a crucial part of the infrastructure and maintenance of society in almost all countries. In particular, the energy industry comprises of oil, gas, coal, nuclear, hydro, wind, solar, and firewood fuel sources…. Read More. Also see the Industry Analysis Home Page.

WikiWealth.com Industry Analysis: The energy industry tends to be very sensitive to economic changes. Demand for energy is inelastic, so it does not easily change with changes in price. Therefore, changes in supply have a large impact on the price of fuel. Some sectors of the energy industry require large investments over an extended period of time, which causes issues with adjusting energy supply with demand, so prices tend to be volatile. Energy industry stock prices tend to move in line with energy commodity prices. During economic recessions, consumers may decrease expenses slightly, but the majority of energy costs are not flexible, because they are needed for everyday living.

Since energy needs are inflexible, stock prices are less influenced by changed in the economy. However, commodity prices such as oil or natural gas have a direct impact on energy stock investments. Changes in commodity prices are a result of changes in supply and demand. Recently, oil prices increased, because of the demand for oil from emerging markets. Unfortunately, the global recession decreased growth estimates and demand until oil prices fell from 160 dollars a barrel to 35 dollars a barrel.

Part of oil prices changes are do to speculation. When speculators increase the price of oil, many alternative sources of fuel become profitable. When companies make investments in these alternative sources of fuel, supply increases until energy prices start to fall. If prices fall too far, then the alternative fuel sources become less profitable and shutdown, which decreases demand. Stock prices rise and fall with energy commodity prices.

¹ WikiWealth.com only uses the largest 30 companies in each industry for the basis of these financial measures. Each statistic is the market weighted average of the 30 companies.

² Investment potential (margin of safety) is a weighted average of the discounted cash flow analysis (DCF), the enterprise value (EV) market multiple analysis, and the Warren Buffett investment analysis. WikiWealth obtains 80% of their quantitative investment potential from fundamental investment analysis.

WikiWealth.com Profit Analysis: The best way to profit from energy stock investments is to find the most undervalued investments (Wall Street and Main Street buy ratings) during economic recessions. Those investments should be undervalued (see Wall Street Analysis on left side), and have high Main Street Common Sense investment ratings (see Main Street Analysis on right side). When an economic recovery occurs, energy stocks tend to outperform the general stock market, because general consumer demand increases.

Energy stocks are most sensitive to commodity prices, which are an indicator of future energy demand. Energy commodity speculators try to predict the demand and supply of commodities, but their generally set prices too high during economic expansions and too low during economic recessions. Therefore, the best time to make energy stock investments is during economic recessions. The best time to sell energy stocks is in the late stages of economic expansions, when energy stocks and commodity prices are above their fair prices. Expensive (overvalued) stocks with low Main Street Common Sense ratings should be sold at any time to invest in better stocks. Two buys ratings are the best and two sell ratings are the worst possible stock investments. For more information on stock research ratings click here.

Investment Moats

Investment Moats are fundamental investing theories developed by Warren Buffett and adapted to the SWOT analysis. Investment moats are general characteristics that separate great investments from average stock investments. The wider the investment moat the better. Read more: Investment Moats. For company-specific investment moats: SWOT Analysis.

SWOT Strengths Increase Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

SWOT Weaknesses Decrease Investor Moats: Below is a list of relevant industry investment characteristics, if any exist

Stock Price Triggers

Triggers were developed by WikiWealth.com to predict changes in stock price direction, which depend on events outside of the control of the company. In general, if SWOT opportunities are greater than SWOT threats, the stock price should raise; the opposite is also true. For more precise measures, examine each SWOT opportunity and threat, then rank them according to importance and timing. The more important the investment characteristic, the greater the impact on stock direction. The sooner a investment trigger may occur, the more influence it will have on stock price direction. Read more: Stock Price Triggers. For company-specific stock price triggers: SWOT Analysis.

SWOT Opportunities are Positive Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

SWOT Threats are Negative Stock Price Triggers: Below is a list of relevant industry investment characteristics, if any exist.

Long Company Description (help)

The Exxon Mobil Corporation, or ExxonMobil, is an American oil and gas corporation and a direct descendant of John D. Rockefeller's Standard Oil company. Formed on November 30, 1999, by the merger of Exxon and Mobil, ExxonMobil is the world's largest company by revenue, at $404.5 billion for the fiscal year of 2007. It is also the largest publicly held corporation by market capitalization, at $501.17 billion on April 18, 2008. Exxon's reserves were 72 billion oil-equivalent barrels at the end of 2007 and, at current rates of production, are expected to last over 14 years. While it is the largest of the six oil supermajors with daily production of 4.18 million BOE (barrels of oil equivalent) in 2007, this is only approximately 3% of world production and ExxonMobil's daily production is surpassed by several of the largest state-owned petroleum companies. When ranked by oil and gas reserves it is 14th in the world with less than 1% of the total. Currently, the company ranks #1 in the world in net income, which was almost $40 billion last year.

History

Exxon Mobil Corporation was formed in 1999 by the merger of two major oil companies, Exxon and Mobil. Both Exxon and Mobil were descendants of the John D. Rockefeller corporation, Standard Oil which was established in 1870. The reputation of Standard Oil in the public eye suffered badly after publication of Ida M. Tarbell's classic exposé The History of the Standard Oil Company in 1904, leading to a growing outcry for the government to take action against the company.

By 1911, with public outcry at a climax, the Supreme Court of the United States ruled that Standard Oil must be dissolved and split into 34 companies. Two of these companies were Jersey Standard ("Standard Oil Company of New Jersey"), which eventually became Exxon, and Socony ("Standard Oil Company of New York"), which eventually became Mobil.

In the same year, the nation's kerosene output was eclipsed for the first time by gasoline. The growing automotive market inspired the product trademark Mobiloil, registered by Socony in 1920.

Over the next few decades, both companies grew significantly. Jersey Standard, led by Walter C. Teagle, became the largest oil producer in the world. It acquired a 50 percent share in Humble Oil & Refining Co., a Texas oil producer. Socony purchased a 45 percent interest in Magnolia Petroleum Co., a major refiner, marketer and pipeline transporter. In 1931, Socony merged with Vacuum Oil Co., an industry pioneer dating back to 1866 and a growing Standard Oil spin-off in its own right.

In the Asia-Pacific region, Jersey Standard had oil production and refineries in Indonesia but no marketing network. Socony-Vacuum had Asian marketing outlets supplied remotely from California. In 1933, Jersey Standard and Socony-Vacuum merged their interests in the region into a 50-50 joint venture. Standard-Vacuum Oil Co., or "Stanvac," operated in 50 countries, from East Africa to New Zealand, before it was dissolved in 1962.

Mobil Chemical Company was established in 1950. As of 1999, its principal products included basic olefins and aromatics, ethylene glycol and polyethylene. The company produced synthetic lubricant base stocks as well as lubricant additives, propylene packaging films and catalysts. Exxon Chemical Company (first named Enjay Chemicals) became a worldwide organization in 1965 and in 1999 was a major producer and marketer of olefins, aromatics, polyethylene and polypropylene along with specialty lines such as elastomers, plasticizers, solvents, process fluids, oxo alcohols and adhesive resins. The company was an industry leader in metallocene catalyst technology to make unique polymers with improved performance.

In 1955, Socony-Vacuum became Socony Mobil Oil Co. and in 1966 simply Mobil Oil Corp. A decade later, the newly incorporated Mobil Corporation absorbed Mobil Oil as a wholly owned subsidiary. Jersey Standard changed its name to Exxon Corporation in 1972 and established Exxon as a trademark throughout the United States. In other parts of the world, Exxon and its affiliated companies continued to use its Esso trademark.

On March 24, 1989, the Exxon Valdez oil tanker struck Bligh Reef in Prince William Sound, Alaska and spilled more than 11 million gallons (42,000 m³) of crude oil. The Exxon Valdez oil spill was the second largest in U.S. history, and in the aftermath of the Exxon Valdez incident, the U.S. Congress passed the Oil Pollution Act of 1990. The company is still appealing a $2.5 billion USD punitive ruling, and has not paid any damages yet.

In 1998, Exxon and Mobil signed a US$73.7 billion definitive agreement to merge and form a new company called Exxon Mobil Corporation, the largest company on the planet. After shareholder and regulatory approvals, the merger was completed on November 30, 1999. The merger of Exxon and Mobil was unique in American history because it reunited the two largest companies of John D. Rockefeller's Standard Oil trust, Standard Oil Company of New Jersey/Exxon and Standard Oil Company of New York/Mobil, which had been forcibly separated by government order nearly a century earlier. This reunion resulted in the largest merger in US corporate history.

In 2000, ExxonMobil sold a refinery in Benicia, California and 340 Exxon-branded stations to Valero Energy Corporation, as part of an FTC-mandated divestiture of California assets. ExxonMobil continues to supply petroleum products to over 700 Mobil-branded retail outlets in California.

In 2005, ExxonMobil's stock price surged in parallel with rising oil prices, surpassing General Electric as the largest corporation in the world in terms of market capitalization. At the end of 2005, it reported record profits of US $36 billion in annual income, up 42% from the previous year (the overall annual income was an all-time record for annual income by any business, and included $10 billion in the third quarter alone, also an all-time record income for a single quarter by any business). The company and the American Petroleum Institute (the oil and chemical industry's lobbying organization) put these profits in context by comparing oil industry profits to those of other large industries such as pharmaceuticals and banking.

On June 12, 2008, ExxonMobil announced that it was exiting the retail fuel business, citing the increasing difficulty to run gas stations under rising crude oil costs. The multi-year process will gradually phase the corporation out of the direct market, and will affect 820 company-owned stations and approximately 1,400 other stations operated by dealers distributing across the United States. The sale will not result in the disappearance of Exxon and Mobil branded stations; the new owners will continue to sell ExxonMobil gasoline and license the appropriate names from ExxonMobil, who will in turn get compensated for use of the brand

The Exxon Mobil Corporation global headquarters are located in Irving, Texas. ExxonMobil markets products around the world under the brands of Exxon, Mobil, and Esso. It also owns hundreds of smaller subsidiaries such as Imperial Oil Limited (69.6% ownership) in Canada, and SeaRiver Maritime, a petroleum shipping company.

Organization

The upstream division dominates the company's cashflow, accounting for approximately 70% of revenue. The company employs over 82,000 people worldwide, as indicated in ExxonMobil's 2006 Corporate Citizen Report, with approximately 4,000 employees in its Fairfax downstream headquarters and 27,000 people in its Houston upstream headquarters.

Operating divisions

ExxonMobil is organized functionally into a number of global operating divisions. These divisions are grouped into three categories for reference purposes, though the company also has several ancillary divisions, such as Coal & Minerals, which are stand alone.

• Upstream (oil exploration, extraction, shipping, and wholesale operations) based in Houston, Texas
• Downstream (marketing, refining, and retail operations) based in Fairfax, Virginia
• Chemical division based in Houston, Texas

Operating divisions by category are as follows:

erating divisions by category are as follows:

* Upstream
o ExxonMobil Exploration Company
o ExxonMobil Development Company
o ExxonMobil Production Company
o ExxonMobil Gas and Power Marketing Company
o ExxonMobil Upstream Research Company

Downstream

* ExxonMobil Refining and Supply Company
* ExxonMobil Fuels Marketing Company
* ExxonMobil Lubricants & Specialties Company
* ExxonMobil Research and Engineering Company

* Chemical
o ExxonMobil Chemical Company

* ExxonMobil Global Services Company
o ExxonMobil Information Technology
o Global Real Estate and Facilities
o Global Procurement
o Business Support Centers

SWOT Analysis

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