ExxonMobil (NYSE: XOM) has become a cash-gushing machine in recent years. The oil giant delivered industry-leading cash flow from operations of $17.6 million during the third quarter. It used that money to invest in growing its business while returning a substantial amount to shareholders.
The oil company could produce an even bigger cash flow gusher in the coming years. Here’s a look at its plan to make a boatload of cash over the next few years.
ExxonMobil recently revealed its 2030 plan. That strategy would see the company deliver an incremental $20 billion in annual earnings and $30 billion in cash flow by 2030. That implies compound annual growth rates of 10% for its earnings and 8% for its cash flow.
The crux of that plan is to continue investing heavily in growing its business. Exxon anticipates its capital spending will be between $27 billion and $29 billion next year, rising to a range of $28 billion to $33 billion annually in the 2026-2030 timeframe. Overall, the oil company plans to pump $140 billion into major capital projects and its Permian Basin development program. The company expects these investments will generate returns of more than 30%. Exxon also expects to shave another $7 billion out of its structural costs over the next several years.
Those catalysts will grow the company’s annual cash flow from operations from around $50 billion this year to roughly $80 billion by 2030. That assumes oil averages around $65 a barrel, which is below its recent price in the mid-$70s.
Given the upper limit on Exxon’s planned capital spending range, the company’s growing cash flow will translate into increased free cash flow. At $65 oil, Exxon would produce $165 billion in cumulative surplus free cash flow by 2030 above its current dividend level.
Exxon is currently one of the largest dividend payers in the world. It paid $4.3 billion in the second quarter, which was the second-largest dividend payout among members in the S&P 500 in that period. It has paid $12.3 billion in dividends through the first nine months of this year.
The company recently increased its payment for the 42nd year in a row. That’s an elite record. Less than 4% of companies in the S&P 500 can make that claim. That steady upward trend seems almost certain to continue, given the company’s expectation that it will produce $165 billion in surplus cash after paying dividends at the current level.
Exxon will also undoubtedly return additional cash to shareholders through share repurchases. It expects to buy back about $20 billion in shares next year and another $20 billion in 2026, assuming reasonable conditions in the oil market. That’s higher than this year’s level, which it expects will be around $19 billion. Given the growth expected in its cash flow, Exxon could increase its share repurchase rate in 2027 and beyond if market conditions remain reasonable.
