Exxon Mobil Stays Firm Despite Recent Pipeline Burst

Exxon Mobil Corporation (XOM) faced an expensive explosion when its Mayflower, Arkansas’ crude oil pipeline burst on March 29. The Pegasus pipeline transports more than 90,000 barrels of Canadian crude oil per day from Illinois to Texas. According to the company’s report to U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration (PHMSA), 3,500 to 5,00 barrels of crude oil leaked.

Crews from PHMSA are monitoring air quality in the area while twenty-two affected residential homes were evacuated immediately after the rupture.

This recent crisis has not moved the investors sentiment on the company. Exxon Mobil recently fell $.65 or .7% to $89.93. This is very minimal compared to BP’s 13% downturn after the Gulf oil spill.

Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products. The company also transports and sells crude oil, natural gas, and petroleum products. It has approximately 37,228 gross and 31,264 net operated wells. Exxon Mobil has a market cap of $405.84 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 9.3, below the S&P 500 P/E ratio of 17.7. Shares are up 3.9% year to date as of the close of trading on Wednesday.

Exxon Mobil maintains very low debt given its size. Exxon Mobil’s debt-to-equity ratio is very low at 0.07 and is currently below that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.70 is somewhat weak and could be cause for future problems.

The rest of its balance sheet is strong. Net operating cash flows increased by 23% to $13.224 million quarter over quarter. The industry cash flow average is 20.23%.

It’s low costs and solid financials make Exxon Mobil a leader in the energy industry. It exceeded the S&P 500 and Oil, Gas & Consumable Fuels industry average net income. From $9.4 million to $9.950 million, Exxon Mobil increased its net income by 5.8% quarter over quarter.

Other stocks to watch are Range Resources (RRC), Anadarko Petroleum (APC), EOG Resources (EOG), Noble Energy (NBL), Pioneer Natural Resources (PXD), Marathon Oil (MRO), and small cap energy company PDC Energy (PDCE).

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