Exxon Stock Prices Jump Amid Reported Advanced Acquisition Talks With Repsol
Exxon Mobil saw it's stock prices move up on Tuesday following the release of new reports revealing that the company was now engaging in advanced talks with Spanish oil giant Respol over its Gulf of Mexico assets. Meanwhile, crude oil prices reversed course this week after US President Donald Trump removed National Security Adviser John Bolton from his position due to the ongoing Iran issue.
According to reports citing sources close to the matter, Repsol is apparently now ironing out the exact details of its planned purchase of Exxon's deepwater assets in the Gulf of Mexico. However, sources have stated that there is still no guarantee that the deal will push through as there is still a lot of fine details that need to be agreed upon.
Despite the disclaimer, investors still saw the news as a clear signal to buy Exxon stocks. The company's share prices rose by as much as 0.8 percent this week, inching it close to its peak back in April. Unfortunately, the spike did not continue and the stock continued its trend downward.
Exxon first hinted its intention of selling its Gulf of Mexico assets back in October of last year. The company's assets in the region, which are estimated to be worth around $1 billion, are capable of producing up to 50,000 barrels of crude per day.
The sale will be part of Exxon's bigger plan of investing in other regions such as Guyana and the Permian Basin. Apart from its assets in the Gulf of Mexico, Exxon reportedly plans to sell up to $15 billion of its underperforming assets through 2021.
Deepwater operations, such as Exxon's rigs in the Gulf of Mexico, are much more expensive in the long-term when compared to share basin operations. With the recent decline in crude oil prices, deepwater operations have become less feasible. Exxon is planning to unload some of its more costly operations in the coming years as it tries to shift to more profitable projects.
Meanwhile, crude prices continued to drop amid the ongoing internal turmoil at the White House. US Crude forecasts for October dropped by 0.8 percent to $57.74 per barrel, while Brent crude oil slipped by 0.3 percent to $62.38 per barrel.
The slight dip in oil prices was partly due to the recent developments in the White involving its stance against Iran and the removal of Bolton from his position. Bolton has openly advocated for a more aggressive approach towards Iran and the deployment of additional troops to the country. Bolton's actions and announcements earlier in the year had sent oil prices higher as investors fear a possible new conflict.