Exxon chairman sees energy boom

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Posted 2:10PM on Tuesday, March 5, 2002

HOUSTON - Exxon Mobil Corp. chairman Lee R. Raymond said Tuesday that a recovery in the world economy will boost energy demand over the next decade and help reverse a recent decline in oil industry profit margins. Raymond also declared that the oil giant's financial reports are clear and free of the obscure dealings that caused energy trader Enron Corp. to collapse. ``There are no long-term incentives to manipulate earnings through creative accounting or pro forma results or off-balance sheet debt,'' Raymond told a meeting of analysts. Exxon Mobil called the meeting ``Staying the Course'' and it came against the backdrop of its rising stock price and solid earnings despite a downturn in oil and gas prices. The company's stock has more than recovered from a double-digit dip after the Sept. 11 attacks on New York and Washington and has gained nearly 10 percent in less than two weeks. In midday trading Tuesday on the New York Stock Exchange, Exxon Mobil shares slipped 6 cents to $42.59. UBS Warburg analyst Matthew Warburton said investors' current enthusiasm wasn't a bet that the company would announce exciting news on Tuesday. Rather, the Warburg analyst said in a research note on Friday, investors were drawn by Exxon Mobil's ``conservative accounting policies and impressive financial position,'' making it a ``relative safe haven'' in the Enron-roiled market. Banc of America Securities analyst Tyler Dann said Exxon Mobil was unlikely to change its previous plans for oil production - an increase of 2 percent to 3 percent this year. He said the company would instead focus on stock performance, including a possible increase in its share-repurchase program. Exxon Mobil is the world's largest publicly traded oil company with operations that span the globe from the Gulf of Mexico to the North Sea, West Africa and Asia. It continually searches for new fields to offset slowing production from mature wells. On Monday, Exxon Mobil said it had recently signed an agreement with Kimber Petroleum Corp. of Liberty Corner, N.J., which will convert its chain of service stations to the Exxon brand. Kimber Petroleum is focused in Northern and Central New Jersey. Exxon Mobil's revenue slipped last year to $213 billion as oil and gas prices fell, and the company lost bragging rights as the biggest U.S. corporation to Wal-Mart Stores Inc. Fourth-quarter profit dropped 44 percent from a year earlier, but profits of $2.68 billion still hit Wall Street's targets, thanks to aggressive cost-cutting. The company has also done well in the courts. Last year, a federal appeals court threw out the $5 billion punitive-damages verdict against the company for the 1989 Exxon Valdez oil spill in Alaska, saying the amount was excessive. Exxon Mobil's setbacks have seemed minor by comparison. It temporarily closed natural gas facilities in Indonesia last year because of fighting between government troops and rebels. Test wells in the Asian nation of Turkmenistan were dry holes. The company lost a couple multi-million-dollar lawsuits. Although based in the Dallas suburb of Irving, Exxon Mobil has a large presence in the Houston area. Analysts at Tuesday's meeting were scheduled to visit a nearby company research facility.