By Dhirendra Tripathi
Investing.com – Exxon Mobil Corporation (NYSE:XOM) stock traded 2% higher Wednesday after the energy major set a target of $9 billion in reduction of structural costs by the end of 2023, $3 billion more than its previous plan envisaged.
Record-high crude prices are also adding to the gains in the stock.
Exxon's new savings will be enough to pay for 60% of the company’s dividend, the third highest in the S&P 500 Index, according to Bloomberg data. The savings will help to double earnings and cash flow “potential” by 2027 while boosting returns, Exxon said.
Under CEO Darren Woods, Exxon has followed an aggressive strategy to cut costs. It recently announced plans to relocate its Irving, Texas headquarters to its main campus in Houston. For the first time since the 1980s, the company has laid off staff, Bloomberg said.
The cost-cutting plan is expected to cheer investors as it means less production of polluting fuels. Exxon is pursuing a policy of eliminating emissions at its own operations on a net basis. This does not include pollution from its fossil fuels burnt at customer-end.
Exxon has allocated $15 billion over six years to reduce greenhouse gas emissions in company operations and for investments in lower emission business opportunities.
The company also has plans for a hydrogen and carbon capture plant at its Baytown Refinery in Texas.