Exxon Mobil on Track to Repeat Guyana's Success: Is Now the Time to Buy Shares or Wait for the First Drilling?

Source link: Exxon Mobil on Track to Repeat Guyana's Success: Is Now the Time to Buy Shares or Wait for the First Drilling? Investment in Trinidad could open a new growth horizon for Exxon Mobil, but the company's share value still depends above all on the strength of its current business. In brief, Exxon Mobil hopes to achieve success in Trinidad's deep waters similar to Guyana's oil discoveries. The company's exploration block covers about 71

Investing in Trinidad can create a new growth horizon for ExxonMobil; But the company's stock value still depends more on the strength of its current business than anything else.

ExxonMobil is hoping to find success in Trinidad's deep waters, similar to Guyana's oil discoveries.

The exploratory block of this company has an area of about 7165 square kilometers and drilling in it is technically and financially expensive.

The company's current profitability is not dependent on the Trinidad project, and oil production in other areas continues to develop.

Buying shares before drilling can create growth opportunities, but the outcome of exploration and the current share price are still decisive.

Why can Trinidad become another Guyana?

In search of new oil sources, Exxon Mobil has set its sights on Trinidad and Tobago; A country near Guyana whose huge oil discoveries have become one of the most important drivers of the company's growth in recent years.

This company has acquired the rights to explore a block named "TTUD-1". The area of ​​this area is about 7165 square kilometers; An area larger than the total land area of ​​Trinidad and Tobago. The waters of this area are about 2000 to 3000 meters deep; Therefore, drilling operations require advanced equipment, significant capital and the ability to manage technical risks.

ExxonMobil's experience in Guyana can be an important advantage. In 2015, the company made the major oil discovery of Lisa, and after that, together with its partners, it registered more than 30 other oil discoveries. By the end of 2025, Guyana's oil production had reached about 900,000 barrels per day.

ExxonMobil and its partners have committed more than $60 billion to develop Guyana's offshore resources and have plans to increase production capacity to about 1.7 million barrels per day by 2030. The company now hopes to apply some of its geological, drilling and development experience to Trinidad as well.

According to the schedule announced in the article, ExxonMobil plans to select the first drilling site by mid-2027. Exploratory drilling may also begin in late 2027 or early 2028. However, geological similarities alone do not guarantee that Trinidad also has resources on the scale of Guyana.

Will ExxonMobil grow without Trinidad?

The important thing for investors is that ExxonMobil is not dependent on the success of this exploration project to maintain its profitability.

The company reported a profit of $14.5 billion, or $3.48 per share, in the second quarter of 2026. Cash flow from operations reached 23.6 billion dollars and free cash flow reached 17.2 billion dollars. Also, during the same period, the company returned $9.4 billion to shareholders, which included $4.3 billion in dividends and $5.1 billion in share buybacks.

The development process continues in the field of production. Exxon Mobil's production in the Permian Basin during the second quarter of 2026 reached a daily record of 1.8 million barrels of oil equivalent. Additionally, the company's fifth offshore production vessel in Guyana is expected to start operating in the fourth quarter of 2026 and increase production capacity by 250,000 barrels per day.

These figures show that the company's financial strength is based on a set of operating assets and income streams. Therefore, even if the drilling result in Trinidad is disappointing, the fundamentals of ExxonMobil's business will not necessarily be weakened.

"In my opinion, the most important point of this paper is not the probability of repeating Guyana's success, but the difference between the current value of the business and the discretionary value of future discoveries. With the support of production and operational cash flow, Exxon Mobil has the capacity to withstand the failure of an exploration project; An advantage that is less common in companies that rely on a particular asset or discovery. However, this financial strength should not be an excuse to ignore share valuation. The professional approach is to evaluate stocks based on the profitability of existing assets and view Trinidad as a potential opportunity, not a foregone conclusion. Finally, the quality of the company and the attractiveness of the purchase price are two separate issues, and the investor's return depends on the right combination of both."

Buy now or wait for drilling results?

Buying stocks before the first drilling can be attractive for long-term investors; Because if large resources are discovered, the market may reflect the company's growth prospects earlier in the stock price. Conversely, waiting for drilling results reduces geological uncertainty, but some of the market's optimism is likely to have been factored into the share price by then.

However, investing based solely on the probability of oil discovery is a risky approach. Even the discovery of significant resources does not mean a quick start to commercial production; Evaluating reserves, deciding on field development, financing and building infrastructure can take years. On the other hand, share price and company valuation have independent importance. Strong operating performance alone does not guarantee that buying a stock at any price will generate good returns.

Trinidad could be one of ExxonMobil's long-term growth opportunities, but it is still in the exploration phase and its success is not certain. The main strength of the company is the current business and the ability to generate significant cash flow; While new discoveries can add another layer of growth to this collection if successful. For multi-year investors, it is worth considering the stock before the drilling result is determined, provided that the purchase price, current profitability and project risks are also evaluated at the same time.

Artificial intelligence has been used to translate some parts of this report.