Exxon accelerates cost cuts target with focus on returns By Reuters

(Reuters) -Exxon Mobil Corp said on Wednesday it expects to reach as much as $9 billion in annual savings by 2023, $3 billion more than a previous target, helping the top U.S. oil producer boost returns by doubling earnings and cash flow.

The company has been on a major cost-cutting drive in recent months after activist investors seeking to boost returns and address energy transition won three seats on its board last spring. In January, Exxon (NYSE:) disclosed one of the most sweeping restructuring of its global operations.

The moves should help the oil major double earnings and cash flow potential by 2027, compared to 2019 levels, and reduce its break-even costs by around $10 per barrel, it said in a statement ahead of its annual investor day later on Wednesday.

Exxon, which reported some of its best financial results in the fourth quarter of last year on surging oil and gas prices, said it was upgrading its portfolio with “low-cost-of-supply” opportunities to further improve future earnings.

It highlighted the Permian basin of Texas and New Mexico, the top U.S. shale field where Exxon plans to grow production by 25% this year, as part of those low-cost opportunities. Guyana was the other focus area.

The company also reaffirmed plans to invest between $21 billion and $24 billion this year and between $20 billion and $25 billion per year through 2027, directing a large portion of that money to low-carbon projects.

Spending plans include more than $15 billion over the next six years to reduce greenhouse gas emissions in the company’s operations and for investments in lower-emission business opportunities, Exxon said.

The company’s shares were up 1.8% premarket, in line with other energy stocks, as oil prices crossed $111 per barrel.