Research Update: Exxon Mobil Corp. 'AA+' Rating Affirmed, Outlook Negative, As Credit Ratios Remain Subdued On Higher Capital Spending

We believe U.S.-based integrated oil company Exxon Mobil Corp. will generate limited cash flow leverage improvement and negative discretionary cash flow over the next three years as it ramps up capital expenditures on longer-term projects and continues to grow its dividend, while downstream and chemicals margins remain challenging. While we expect upstream volumes to grow steadily over the next five years, as production expands in the Permian Basin and major projects in Guyana, Papua New Guinea and Mozambique come on line, we don't expect these projects to start generating positive free cash flow until after 2021. We are affirming our 'AA+' long-term issuer credit rating and unsecured debt ratings on ExxonMobil. We are also affirming our 'A-1+' short-term issuer credit

...- We believe U.S.-based integrated oil company Exxon Mobil Corp. will generate limited cash flow leverage improvement and negative discretionary cash flow over the next three years as it ramps up capital expenditures on longer-term projects and continues to grow its dividend, while downstream and chemicals margins remain challenging. - While we expect upstream volumes to grow steadily over the next five years, as production expands in the Permian Basin and major projects in Guyana, Papua New Guinea and Mozambique come on line, we don't expect these projects to start generating positive free cash flow until after 2021. - We are affirming our '##+' long-term issuer credit rating and unsecured debt ratings on ExxonMobil. We are also affirming our 'A-1+' short-term issuer credit and commercial paper (CP) ratings. - The negative outlook reflects our view that ExxonMobil's current cash flow leverage ratios are at the weaker-end of the range for the rating, as well as the potential for a downgrade...

Research Update