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XOM · Forward model · Upstream · Bear case

What has to happen in Upstream

Model as of

This page changes Upstream inside the complete XOM model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

XOM forward model
Horizon
Consolidated fair value $87.39 all other verticals held in this portfolio case
Final-quarter revenue $11.75B 17% of company revenue
Explicit segment contribution $84.40B EBITDA less segment capex, before corporate items

The disruption ends. Brent returns from $104.52 to the $63.69-69.07 of 4Q25 and 3Q25 and the indicative refining margin from $29.0/bbl to $17.5-18.3, which at the disclosed sensitivities of $700M and $800M of annual earnings per $1/bbl removes roughly $25-28B and $9B of annualised earnings. This case needs no demand recession. The disclosed Strait of Hormuz downside - about 750 koebd of Middle East production against 2025 if the Strait stayed closed through 3Q26 - is a single-quarter outage that no persistent level step can represent, so it is carried here as a deeper and faster price and margin reversion rather than as a volume step.

Upstream

Basis quarter$13.61B
Final quarter$11.75B
Implied CAGR−3%
Final revenue mix17%

ExxonMobil lifts oil-equivalent barrels and monetises most of them through intersegment transfers to Energy Products, so the reported Upstream line is only the third-party slice. Volume is disclosed every quarter and is the thing management guides to 2030; price is Brent, which nobody guides. The company itself models this segment as volume times unit earnings per oil-equivalent barrel, so a unit driver is the honest shape.

Last four quarters
2025 Q3 $11.82B Reported
2025 Q4 $9.51B Estimated
2026 Q1 $11.21B Reported
2026 Q2 $13.61B Reported
Crude oil, natural gas liquids, bitumen and synthetic oil sold to third partiesNatural gas and LNG sold to third partiesEquity-affiliate income, largely non-U.S. gas and LNG ventures
Units 410774000/qtr growing −4.4% per quarter 410.8M boe in 2026 Q2: the disclosed 4,514 koebd across 91 days.
Price per unit $33 drifting −5.5% per quarter $33.13 per boe of reported revenue on a $104.52 Brent quarter, not the $97.58 realisation: most barrels transfer out.
Upstream

Latest: $11.75B (2031Q2E)

Period Value
2024Q1 $7.42B
2024Q2 $12.24B
2024Q3 $12.17B
2024Q4 $12.48B
2025Q1 $12.77B
2025Q2 $10.65B
2025Q3 $11.82B
2025Q4 $9.51B
2026Q1 $11.21B
2026Q2 $13.61B
2026Q3E $12.14B
2026Q4E $11.71B
2027Q1E $11.44B
2027Q2E $11.26B
2027Q3E $11.15B
2027Q4E $11.10B
2028Q1E $11.08B
2028Q2E $11.08B
2028Q3E $11.10B
2028Q4E $11.14B
2029Q1E $11.18B
2029Q2E $11.23B
2029Q3E $11.29B
2029Q4E $11.35B
2030Q1E $11.41B
2030Q2E $11.47B
2030Q3E $11.54B
2030Q4E $11.61B
2031Q1E $11.68B
2031Q2E $11.75B

Assumptions & reasoning

  • Revenue per barrel here is $33.13, not the disclosed $97.58 U.S. crude realisation: the segment line is net of intersegment eliminations, so the realisation is a price sensitivity rather than this line's unit price.
  • The first projected quarter carries a 4.43% volume step down: the disclosed ~100 kbd fall in Guyana net entitlement from 3Q26 now that cost recovery is reached, plus the ~100 koebd of Qatar LNG capacity the company says stays offline. The Strait of Hormuz case is conditional and sits in the bear scenario instead.
  • Units are a quarterly barrel count built from the disclosed daily rate across 91 days, so quarters of 90 or 92 days carry about a 1% counting difference the model does not correct.
  • The 2Q26 U.S. natural gas realisation of $0.52/kcf against a $2.90/mbtu Henry Hub is disclosed and unexplained, far outside the $1.75 against $3.55 of 4Q25. It is not extrapolated; the disclosed $90M per $0.10/mbtu annual sensitivity is the gas lever this model relies on.
  • The EBITDA margin is held at 100%, the ceiling the control allows. The brief derives 127% for the basis quarter because transferred barrels sit in the numerator and not the denominator; the $3,664M the cap cannot hold is credited to Energy Products, which buys those barrels, so consolidated EBITDA still reconciles.
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