Mighty Exxon, as I pointed out previously, is showing signs of strain as it juggles growth plans, dividends and buybacks with oil at about $30 a barrel. But it isn't alone.
The chart below shows how Exxon's capital spending has jumped compared with its cash flow per share, leading the oil major to borrow more to fund its shareholder payouts.
Yet Exxon is hardly in the worst shape on this score -- far from it. Take a look at the same chart, but this time including four of Exxon's competitors, too: Chevron, Royal Dutch Shell, BP and Total.
As you can see, the group as a whole hit an unwelcome milestone last year, with both capex and net debt per share rising higher than cash flow. Given Exxon hasn't quite reached that point yet, at least in terms of capex, clearly some rivals are doing worse.
First up is Chevron:
Next up is BP:
And finally, Total:
To untangle those lines, all the majors are taking an ax to investment budgets. Exxon and Chevron have made or announced the deepest cuts, percentage-wise, relative to 2013, with the latter company helped by the roll-off of some large LNG projects as they are completed.
Looking ahead to the rest of 2016, Exxon looks best positioned out of the group to withstand low oil prices:
Even so, with Brent futures implying an average price this year of more like $36 a barrel, none of the majors are close to paying their way in 2016 if oil doesn't rally meaningfully. And having slashed investment to protect their dividends, they will likely need to get active on the deal-making front if they want to refill their reserves.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story:
Liam Denning in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story:
Mark Gongloff at email@example.com