XOM – Market expectations are for Uniform ROA to remain muted, but management is confident about their operations growth and future opportunities

• Exxon Mobil Corporation (XOM:USA) currently trades below UAFRS-based (Uniform) Assets, with a 0.9x Uniform P/B, implying bearish expectations for the firm. However, management is confident about their new well growth and their opportunities
• Specifically, management is confident that they have a competitive advantage through investment and that they have taken advantage of recent downturns and commodity prices to create significant opportunities. Furthermore, they are confident that they were able to invest countercyclically to take advantage of attractive low-cost environments, and they are confident that having a downturn in margins represents an attractive time to invest. Additionally, they are confident they drilled two more attractive wells on Hammerhead and that the strength of opportunities allows them to acquire attractive resources at competitive prices. Finally, they are confident their discovered resources are well-delineated and that they have high conversion refineries in the US.