Texas-based Exxon Mobil Corp. says it will cut capital spending by 25 per cent this year, but it is interested in making acquisitions if the price is right.
At its annual general meeting Wednesday, CEO Rex Tillerson says Exxon has been looking to snap up smaller oil companies, but sellers have unrealistic price expectations.
Many small companies have burdened themselves with debt, yet are behaving like homeowners who think their house is worth more than it is.
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"Some of the value has been destroyed and the expectation (of sale price) hasn't changed," he said while meeting with investors in New York. Exxon has a triple-A credit rating and recently raised $12 billion from a bond sale.
"We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals," Tillerson said.
Too much production
Tillerson said he was not optimistic about a rise in oil prices this year, as there is still too much global production, despite a pullback by U.S. producers.
Exxon said it will produce between 4.0 million and 4.2 million barrels of oil equivalent per day through 2020, compared to 4.25 million in the last quarter of 2015.
It expects its capital spending to be $23.2 billion this year and even lower next year while prices remain low.
Exxon's capital spending hit a peak of $42.5 billion in 2013.
Oil and gas companies throughout the world have pulled back on spending as the price of oil sank in the last 20 months.
In Canada, Exxon holds a majority stake in Imperial Oil as well as the Hebron and Sable island offshore projects.