An XOM trade seems like a likely winner.
First, if XOM loses the arbitration, it doesn't lose its interest in the Guyana oil. It simply does not obtain the Hess portion. Its only loss are the legal fees which have been incurred, something XOM can pay with an hour's worth of production.
Second, if XOM wins, it obtains a very nice boost to its reserves, a boost which will of course be reflected in the share price. If CVX loses, it might seek some sort of appellate remedy, but reversal is very unlikely. IMO the arbitration panel's decision will control. It should mark the end of the litigation
The arbitration has been heard. A decision is expected in August.
I already own XOM, but will buy more in anticipation of the result. It is a great investment (dividend, management, etc.) even if it loses the arbitration. So, no loss should CVX win the arbitration, just a loss of an instant 15-20% boost in the share price. Otherwise, all other fundamentals remain unaffected.
How profitable is Guyana? Very nice field:
Exxon-led consortium's profit in Guyana rose to $10.4 bln in 2024
10:49:20 AM ET, 06/03/2025 - Reuters
GEORGETOWN, June 3 (Reuters) - The profit of a consortium by oil producers Exxon Mobil, Hess and CNOOC in Guyana increased 64% last year to $10.4 billion, Exxon said on Tuesday.
The group's expenses in the South American country rose to $4.9 billion in 2024 from $3.5 billion the previous year, the U.S. company added. (Reporting by Kemol King, writing by Marianna Parraga)
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