Sustainable Finance Newsletter - Carbon Markets Give Environmentalists Hope After Us Elections

In an Oval Office meeting on Wednesday, President Joe Biden and President-elect Donald Trump both pledged a smooth transition of power, marking a formal beginning to the handover process.

Biden congratulated Trump and assured him the administration would fully support his team's needs for a seamless transition, CBS News reports.

What Happened: After a private gathering with House Republicans, Trump met Biden at the White House, where the two leaders exchanged brief words before the press. “Well Mr. President-elect, former president, Donald, congratulations, and looking forward to... a smooth transition,” Biden said.

“Thank you very much,” Trump responded, adding that “politics is tough” and “not a very nice world,” but he appreciated the “smooth transition” underway, saying, “It’ll be as smooth as it can get.”

In addition to the ceremonial meeting, Trump has begun shaping his administration's agenda. A key focus is energy policy, with Trump reportedly considering appointing an "energy czar" to lead efforts in scaling back environmental regulations and increasing fossil fuel production.

North Dakota Gov. Doug Burgum, a former software executive and oil industry advocate, is said to be the frontrunner for this role.

Read Next: Trump Presidency Magnificent 7 Stock Impact: Benzinga Readers Pick Tech Titan At Most Risk Following 2024 Election

Why It Matters: The symbolic meeting between Biden and Trump emphasizes the importance of a peaceful transfer of power in the face of a contentious recent history. Trump did not hold a similar meeting with Biden in 2021 in the wake of the Jan. 6 Capitol riot, when Trump left the White House after falsely stating he won the 2020 election.

Before his Oval Office meeting with Biden, Trump was met with a standing ovation by House Republicans and accompanied by high-profile supporters, including Elon Musk, who has recently played a role as an advisor to Trump's campaign.

This transition sets the stage for a fresh political landscape, with Trump's leadership poised to steer the country in a markedly different policy direction.

Read Next:

• Elizabeth Warren Says Trump And His Transition Team Are Already Crossing Legal Boundaries: ‘I Would Know Because I Wrote The Law’

Photos courtesy: Shutterstock, Midjourney.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Exxon Mobil Corp shares have remained flat over the past week since Donald Trump's presidential election win, reflecting investor caution about how his energy policies may impact the oil and gas giant.

Although Trump's pro-fossil fuel stance and potential regulatory rollbacks favor Exxon's business model, broader uncertainties around global oil demand and geopolitical risks are tempering market enthusiasm.

What To Know: One of the most immediate potential benefits for Exxon under a Trump administration would be the loosening of environmental regulations. Trump's previous term saw a significant easing of restrictions on drilling, fracking, and pipeline construction, and a similar approach is expected this term.

This could allow Exxon to expand domestic operations more freely, particularly in high-yield shale areas like the Permian Basin, boosting production capacity without facing significant regulatory hurdles.

However, it's unclear whether demand will fully recover, particularly with shifting global priorities toward renewable energy.

Another aspect of Trump's policy agenda is his intention to exit the Paris Climate Agreement and potentially unwind portions of the Inflation Reduction Act that subsidize renewable energy.

Read Also: Markets Breathe Sigh Of Relief After In-Line Inflation Data: Stocks Rebound As Small Caps, Bonds Soar

This could slow the transition to green energy in the U.S., potentially extending the timeline for oil and gas demand, which is positive for Exxon's long-term outlook in fossil fuels.

However, these moves also risk diplomatic tensions and could spur foreign governments to double down on renewable commitments, potentially limiting Exxon's international expansion opportunities.

What Else: Exxon's reliance on global markets also faces uncertainties tied to Trump's approach to trade and international sanctions. Trump has signaled possible sanctions relief on Russia, which could open new partnership opportunities for Exxon in Russian oil projects, a region with untapped potential.

However, increased tariffs and trade tensions with other countries could disrupt the global oil market, adding complexity to Exxon's growth strategy.

Overall, while Trump's policies may create a more favorable operating environment for Exxon domestically, global demand uncertainties and international risks keep investors cautious.

Read Also: October Inflation Rate Rises To 2.6% As Expected: December Interest Rate Cut Remains Uncertain

Investors can gain exposure to XOM by investing in the Energy Select Sector SPDR Fund .

Is XOM A Good Stock To Buy?

An investor can make a few decisions when deciding whether a stock is a good buy. In addition to valuation metrics and price action which you can find on Benzinga's quote pages – like Exxon Mobil‘s page for example – there are factors like whether or not a company pays a dividend or buys a large portion of its stock each quarter.

These are known as capital allocation programs. Exxon Mobil does pay a dividend, which yields 3.37% per year as of the closing price on Nov. 13, 2024. Feel free to search Benzinga's dividend calendar for the next company that is due to pay a dividend and determine what kind of yield you can earn for holding a share of the company.

For example, if you're looking to earn an annualized return of 11.56%, you'll need to buy a share of Cardinal Energy by the Nov. 29, 2024. Once done, you can expect to receive a nominal payout of $0.06 on Dec. 16, 2024.

Buyback programs are obviously different and highly variable. A company can approve a buyback program and purchase shares as it sees fit over the course of time in which the buyback was authorized. Looking through the latest news on Exxon Mobil will often yield whether or not the company has approved a buyback program recently. Buyback programs usually serve as a support for share prices, serving as a backstop for demand.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Exxon Mobil Corporation XOM, the U.S.-based oil and gas giant, has entered into an agreement to sell its older assets located in the Permian Basin of Texas and New Mexico. The company has not disclosed the buyer of the assets or the deal’s valuation. However, according to sources, the assets have been sold to a privately held energy company, Hilcorp Energy, for approximately $1 billion.

XOM Sells Permian Basin Assets to Hilcorp Energy

Per Reuters, ExxonMobil had previously auctioned these assets to shift its focus on shale drilling properties which offer higher growth and better returns. Hilcorp Energy emerged as the winner of the auction, buying these assets for approximately $1 billion. ExxonMobil stated that the transaction will likely be closed in the March quarter of 2025.

XOM's divestment involves conventional oil drilling assets in the Permian Basin. The company mentioned that these assets include conventional vertical wells, not horizontal ones. Vertical wells are typically less advanced than horizontal wells used in shale production.

XOM Maintains Focus on High-Growth Shale Properties

The company stated that the divestment aligns with its strategy to focus on investments that improve its portfolio by adding advantaged assets. ExxonMobil also mentioned that it has been continuously optimizing its portfolio to focus on its most profitable assets. The company follows a strategy of divesting its non-core assets and using the proceeds to strengthen its balance sheet.

Hilcorp Energy Expands Portfolio

The company specializes in buying older, mature assets from rival companies in the industry and is one of the most active buyers of such assets. Previously, the private firm acquired Eni’s assets offshore Alaska in a deal worth $1 billion. The U.S. oil and gas sector has recently witnessed a consolidation trend within the industry. Taking advantage of the favorable commodity price environment, many oil and gas majors have pursued large mergers, such as the $60 billion acquisition of Pioneer Natural Resources by ExxonMobil and the pending $53 billion all-stock merger between Hess and Chevron Corporation.

XOM’s Zacks Rank and Key Picks

Currently, XOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, Smart Sand, Inc. SND and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while Smart Sand and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Smart Sand is a low-cost producer of high-quality Northern White frac sand, an ideal proppant for hydraulic fracturing and various industrial applications. The company provides proppant and other logistics services for several companies in the oil and gas industry. With sustained demand in the oil and gas market, SND is expected to see growing demand for its services, reflecting a positive outlook.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

Zacks Investment Research

Energy stocks were advancing premarket Wednesday, with The Energy Select Sector SPDR Fund 0.1% higher.

The United States Oil Fund was down 0.6% and the United States Natural Gas Fund was 1.8% lower.

Front-month US West Texas Intermediate crude oil was 0.4% lower at $67.85 per barrel at the New York Mercantile Exchange. Global benchmark North Sea Brent crude oil lost 0.4% to reach $71.61 per barrel, and natural gas futures were down 1.8% at $2.86 per 1 million British Thermal Units.

DHT Holdings shares were up more than 2% after the company reported higher Q3 earnings and shipping revenue.

Exxon Mobil has agreed to sell conventional oil-drilling assets in the Permian Basin to Hilcorp Energy, a spokesperson confirmed. Exxon Mobil shares were up 0.4% pre-bell.

Shell's Singapore refinery is on track to complete its sale to a joint venture between Indonesia's Chandra Asri and Switzerland's Glencore by Q1, Reuters reported, citing sources familiar with the matter. Shell shares were down 0.9% premarket.