According to a report by Reuters, citing industry sources familiar with the matter, Exxon Mobil Corporation (XOM) has already discussed with several North Sea operators a potential sale of some or all of its assets in the area, which could generate up to $2 billion.
The report of a potential exit from the British North Sea comes after earlier this year Exxons US competitors Chevron and ConocoPhillips sold a major part of their operations in the same area.
Exxon Mobil shares closed higher for the third time in the past ten trading sessions in New York on Tuesday. The stock went up 1.24% ($0.86) to $70.49, after touching an intraday low at $68.92, or a price level not seen since January 3rd ($68.36).
Shares of Exxon Mobil Corporation have risen 3.37% so far in 2019 compared with a 16.73% gain for the benchmark index, S&P 500 (SPX).
In 2018, Exxon Mobil Corp’s stock went down 18.47%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.
According to the sources, potential buyers could be large North Sea producers such as Neptune or Chrysaor. In case the direct discussions with potential buyers turn out to be unproductive, Exxon Mobil Corp will appoint an external bank to run a formal sale process, the sources also said.
The oil major manages its operations in the British North Sea via a 50-50 joint venture with Royal Dutch Shell under the name of Esso Exploration and Production UK. The venture has interests in about 40 oil and gas fields in the region, where Exxon Mobils daily production reaches nearly 80 000 barrels of oil and 441 million cubic feet of gas.
Analyst stock price forecast and recommendation
According to CNN Money, the 18 analysts, offering 12-month forecasts regarding Exxon Mobil’s stock price, have a median target of $82.00, with a high estimate of $108.00 and a low estimate of $74.00. The median estimate represents a 16.33% upside compared to the closing price of $70.49 on August 13th.
The same media also reported that at least 15 out of 22 surveyed investment analysts had rated Exxon Mobil’s stock as “Hold”, while 5 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.