Exxon Mobil (XOM, Financial) is one of the largest oil and gas corporations in the United States in terms of market capitalization. Ever since its establishment in the late 1999, it has enjoyed a strong presence in the energy sector that has been rivaled by only a few. So does this mean you should be ready to invest all of your savings into this stock? To satisfactorily answer this question one will have to look at several angles with regards to this stock. The performance of oil and gas stocks has been shaky to say the least in the recent months. Analysts have attributed this to the fact that oil prices have been constantly fluctuating while news of depleted natural gas reserves have hit news headlines on more than one occasion. Despite the looming cloud of uncertainty that has had Exxon shareholders on the edge of their seats ready to bail out at the slightest hint of trouble, I have been able to ascertain after an in depth evaluation of the Exxon stock that there isn't any cause of alarm among its shareholders.
I am however sure that most, if not all, critics would disagree with me and tell you that your investment would be safer in other sectors whose share price cannot be easily influenced through either politics or lawsuits that just keep on piling up. The fact of the matter is that investing requires an individual to take risks and have a bullish attitude and that is why, I believe in Exxon Mobil. Although Exxon has enjoyed supremacy of sorts in the energy sector, more powerful adversaries have been bidding their time as they try to oust it from its comfort position.
Competition from other energy heavyweights
The presence of competitors such as BP (BP, Financial) and Chesapeake (CHK, Financial) in the oil and gas industry has posed a great challenge to Exxon due to various factors. Competition for various mining rights in different parts of the globe has intensified which is one of the reasons that can be attributed to the disappointing performance of Exxon’s stock in the past few months. Exxon posted a significant drop in their revenue, a fact that many critics may be quick to point out in order to substantiate their fears in the energy sector. The fact that Chesapeake comes second only to Exxon in the mining of natural gas and distributes it for considerably lower prices has meant that Exxon has had to experience a tougher time in the market in comparison to other competitors such as Chevron (CVX, Financial) and ConocoPhillips (COP, Financial) which have all had to adapt to the environmental changes that affect natural gas production. So how will Exxon deal with all these challenges and ensure that it remains number one in the energy sector?
The strategy to remain on top
One of the attributes exhibited by Exxon that has given me confidence in this stock is its ability to adapt to the changing energy sector atmosphere in different ways. Among the most notable and effective strategies that Exxon has come up with has been the expansion of its operations into other regions, both inside and outside of the United States. This has proven to be quite instrumental in its growth as it has been able to capture a larger market through its overseas sales and mining rights. Although some of its main rivals (BP and Chesapeake which are proving to be worthwhile competitors) have also undertaken their own expansion projects, none have come close in terms of magnitude to what Exxon has done. One such example is that Exxon has chosen to invest $75 million in Hungary where it will take a 67% stake in a contracted area licensed by Falcon in an exploration deal.
Due to the fact that oil and gas deposits have been increasingly hard to come by, I am sure that this deal will give Exxon an edge over the rest of the pack.
The fact that Exxon has also had quite a bit of experience to say the least in exploration and mining as compared to the rest, has assured me that this is the best place for any investor looking to get a hold of any profitable oil and gas stock.
I am however sure that most, if not all, critics would disagree with me and tell you that your investment would be safer in other sectors whose share price cannot be easily influenced through either politics or lawsuits that just keep on piling up. The fact of the matter is that investing requires an individual to take risks and have a bullish attitude and that is why, I believe in Exxon Mobil. Although Exxon has enjoyed supremacy of sorts in the energy sector, more powerful adversaries have been bidding their time as they try to oust it from its comfort position.
Competition from other energy heavyweights
The presence of competitors such as BP (BP, Financial) and Chesapeake (CHK, Financial) in the oil and gas industry has posed a great challenge to Exxon due to various factors. Competition for various mining rights in different parts of the globe has intensified which is one of the reasons that can be attributed to the disappointing performance of Exxon’s stock in the past few months. Exxon posted a significant drop in their revenue, a fact that many critics may be quick to point out in order to substantiate their fears in the energy sector. The fact that Chesapeake comes second only to Exxon in the mining of natural gas and distributes it for considerably lower prices has meant that Exxon has had to experience a tougher time in the market in comparison to other competitors such as Chevron (CVX, Financial) and ConocoPhillips (COP, Financial) which have all had to adapt to the environmental changes that affect natural gas production. So how will Exxon deal with all these challenges and ensure that it remains number one in the energy sector?
The strategy to remain on top
One of the attributes exhibited by Exxon that has given me confidence in this stock is its ability to adapt to the changing energy sector atmosphere in different ways. Among the most notable and effective strategies that Exxon has come up with has been the expansion of its operations into other regions, both inside and outside of the United States. This has proven to be quite instrumental in its growth as it has been able to capture a larger market through its overseas sales and mining rights. Although some of its main rivals (BP and Chesapeake which are proving to be worthwhile competitors) have also undertaken their own expansion projects, none have come close in terms of magnitude to what Exxon has done. One such example is that Exxon has chosen to invest $75 million in Hungary where it will take a 67% stake in a contracted area licensed by Falcon in an exploration deal.
Due to the fact that oil and gas deposits have been increasingly hard to come by, I am sure that this deal will give Exxon an edge over the rest of the pack.
The fact that Exxon has also had quite a bit of experience to say the least in exploration and mining as compared to the rest, has assured me that this is the best place for any investor looking to get a hold of any profitable oil and gas stock.
