© Reuters. ExxonMobil (XOM) Bursts Higher on Upgrade, Deal with QatarEnergy to Expand LNG Production
By Sam Boughedda
ExxonMobil (NYSE:) shares surged 6% Tuesday after Credit Suisse upgraded the stock to Outperform and the company and QatarEnergy announced that they have signed a deal to further develop Qatar’s North Field East project.
Credit Suisse upgraded ExxonMobil shares from Neutral to Outperform, increasing their price target on the stock to $125 from $115.
Analyst Manav Gupta said in a note to investors that despite oil and gas companies cutting back on investments in the sector in recent years, “XOM always believed that the world will need fossil fuels for much longer and in the medium-term demand for oil and gas will be increasing not contracting.”
“As a result, XOM has continued to invest in some of the most attractive Oil & Gas projects globally. Post Russia-Ukraine conflict, where we are short , refined products and , we expect XOM’s differentiated growth strategy will deliver excellent returns for its investors.”
On the deal with QatarEnergy, ExxonMobil said the deal will expand Qatar’s annual LNG capacity from 77 million tons to 110 million tons by 2027, while ExxonMobil’s participation in Qatar LNG volumes is expected to increase total capacity from 52 to 60 million tons per year.
QatarEnergy and ExxonMobil will partner in a new joint venture company, with QatarEnergy holding a 75% interest and ExxonMobil holding 25%. The joint venture will own 25% of the North Field East project.
“We are collaborating with QatarEnergy on North Field East to accelerate the production of secure, affordable and cleaner energy our world needs,” said Darren Woods, chairman and chief executive officer for ExxonMobil.