Exxon Mobil Corporation (NYSE:XOM) XOM announced that it is acquiring a 49.9% stake in Biojet AS as part of its plans to increase spending in low-carbon businesses.
Biojet AS is a Norwegian biofuel company, which aims to transform forestry and wood-based construction waste into low-carbon biofuel. Biojet AS intends to build up to five facilities to produce biofuel and biofuel components. The commercial production is expected to start in 2025 at a manufacturing facility, which is to be developed in Norway.
Since biofuel burns faster and cleaner than fossil fuels, ExxonMobil is growing its interest in the fuel to reduce emissions in the transportation sector. Biofuel can help reduce life-cycle greenhouse gas emissions by 85%.
Per the terms of the agreement, ExxonMobil will be able to purchase about 3 million barrels per year of biofuel. The fuel can be used for passenger vehicles and heavy trucks. For marine transportation and aviation, fresh opportunities may develop as the demand and production of low-emission biofuel are expanding globally.
Acquiring stakes in Biojet AS boosts ExxonMobil's initiatives to provide low-carbon fuel products to the transportation sector. With the acquisition, ExxonMobil moves a step closer to producing 40,000 barrels per day of low-emission fuel by 2025. The company can efficiently deliver biofuel to Norway and countries throughout northwest Europe by utilizing its Slagen terminal.
Energy companies have been under immense pressure due to the growing urgency from investors and environmentalists to curb climate change. XOM plans to cut emissions of greenhouse gases across its operations as well as increase investments in businesses related to low-carbon solutions.
Company Profile & Price Performance
Headquartered in Irving, TX, ExxonMobil is one of the leading integrated energy companies in the world.
Shares of ExxonMobil have outperformed the industry in the past six months. The XOM stock has gained 20.6% compared with the industry’s 18.4% growth.
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Zacks Rank & Other Key Picks
ExxonMobil currently flaunts a Zack Rank #1 (Strong Buy).
Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
TotalEnergies SE TTE has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio, with above industry-average exposure to the faster-growing hydrocarbon-producing regions of the world. TTE is making regular investments to expand the renewable operation and strives to achieve net-zero emission by 2050.
TotalEnergies currently has a Zacks Style Score of A for Value and B for Growth. The company manages long-term debt quite efficiently and tries to maintain the same at manageable levels. TotalEnergies’ debt to capital has been declining in the past few years.
The Williams Companies (NYSE:WMB), Inc. WMB, based in Oklahoma, is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids.
Williams Companies' debt maturity profile is in good shape, with its $4.5-billion revolver maturing in 2023. Williams is also paying its shareholders an attractive dividend, yielding nearly 6%. Beside these, the company's board recently approved a share repurchase program worth $1.5 billion, highlighting its commitment to shareholders.
Murphy USA (NYSE:MUSA) Inc. MUSA, based in El Dorado, AR, is a leading independent retailer of motor fuel and convenience merchandise in the United States. MUSA’s unique high-volume, low-cost business model helps it retain high profitability, even in the fiercely competitive retail environment.
Murphy USA is committed to returning excess cash to shareholders through continued share buyback programs. As part of this initiative, the fuel retailer recently approved a repurchase authorization of up to $1 billion, which will commence once the existing $500-million authorization expires and be completed by Dec 31, 2026. The move underscores MUSA’s sound financial position and commitment to rewarding shareholders.
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