Exxon is interested in acquisitions while oil prices are low, but CEO Rex Tillerson says sellers have unrealistic price expectations.
Tillerson said Wednesday that Irving-based Exxon Mobil, which owns XTO Energy, is in financial position to pursue acquisitions or change its spending plans depending on what happens to the oil market.
Earlier this week Exxon raised $12 billion from a bond sale, increasing speculation that it could seek to scoop up competitors.
Tillerson said Exxon hasn’t made any deals yet because potential sellers are acting like homeowners who think their house is worth more than it is.
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Those other companies, he said, have burdened themselves with debt during the oil slump, making them less attractive takeover targets.
“Some of the value has been destroyed and the expectation (of sale price) hasn’t changed,” he said at Exxon’s annual meeting with investors in New York.
Asked about oil prices, Tillerson said they could still fall. U.S. benchmark crude has rallied since late January and gained 23 cents to $34.64 a barrel in New York on Wednesday afternoon, but it is still nearly 70 percent below its price in June 2014.
“We’re still overproducing, oversupplying a market that doesn’t need it, doesn’t want it,” and the global economy is too weak to boost demand much, he said.
The company, which owns XTO Energy, intends to lower spending by about 25 percent this year to $23.2 billion and will continue shaving cash outlays through the end of 2017, according to the presentation. Unlike most of its competitors, Exxon is under no pressure to resort to asset sales to raise cash as tumbling energy prices erode revenue, Tillerson said.
This article includes material from Bloomoberg News.