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ExxonMobil (XOM) is a hard company to characterize: it does some things so well that it has no peer and it does some things poorly enough to put the company in the middle of the oil company pack.

On the very big plus side, nobody does the integration of refineries and chemical production facilities as well as ExxonMobil does. Approximately 80%, according to Morningstar, of ExxonMobil’s refinery capacity is so tightly integrated with its chemical production facilities that ExxonMobil can reap wider margins with greater flexibility than any of its peers. This advantage isn’t going away and I don’t see any competitor significantly cutting into this advantage at ExxonMobil.

On the other hand, ExxonMobil isn’t outstanding in its ability to grow upstream assets. Some of its recent attempts to acquire production reserves have been badly timed–I’m thinking of the 2010 purchase of XTO Energy for $40.5 billion in 2010. The deal would have been a great one if natural gas prices hadn’t tanked so thoroughly after the acquisition and if XTO’s assets hadn’t been so heavily weighted to natural gas at 84%. A lot of ExxonMobil’s recent moves have been an effort to redress this natural gas/oil imbalance. The big charge to lay at ExxonMobil’s feet, however, isn’t that the company didn’t accurately predict the collapse in oil and natural gas prices–very few did–but that it has been so slow off the block in putting its huge capital advantages at work when so many oil and natural gas producers were scrambling for capital. The recent purchase of 275,000 acres of land in the Permian Basin for $5.6 billion will give ExxonMobile a huge boost in its efforts to raise its exposure to lower cost, unconventional sources of oil and natural gas. (Unconventional production is projected by Morningstar to rise to 20% to 25% of liquids from 12% now.) My big question is Why did the company wait so long? Certainly ExxonMobil wasn’t aggressive in acquiring assets at the bottom of the cycle and now the company is paying much higher prices to acquire new production.

Production volumes at ExxonMobil are projected by the company to stay relatively flat through 2020. In 2016 annual production fell by 1.1% to 4.05 million barrels of oil equivalent per day The company projects production of 4.0 to 4.2 million barrels of oil equivalent by 2020.

In 2015 ExxonMobil failed to replace all of the oil and natural gas it pumped with newly discovered reserves and acquisitions for the first time in 22 years. Exxon held reserves equivalent to 24.8 billion barrels of crude as of December 31, enough to continue current rates of production for 16 years, according to the statement. That is down from 17.4 years of reserves life at the end of 2014, according to data compiled by Bloomberg.

The problem is mostly on the natural gas side. Although the company did replace all the oil it produced, natural gas reserves fell.  In the U.S., natural gas reserves declined by the equivalent of 834 million barrels. In 2016 the company was forced by accounting rules to write off $2 billion in natural gas reserves as prices fell so low that producing gas from some regions in the Rockies no longer fit Securities & Exchange Commission rules for counting reserves. In theory at some point natural gas prices will rise far enough so that the company can rebook those reserves, but there’s no guarantee that these particular reserves will become economically viable again.

If you’re simply looking at a oil production company with an outstanding long-term production potential, I think there are other companies both smaller and more flexible (such as Pioneer Natural Resources (PXD)) and large but more flexible that I’d prefer for a long-term oil stock investment. Which is why I’m selling ExxonMobil out of my long-term 50 Stocks portfolio. On the other hand, if you’re looking for an oil stock that is just about guaranteed to pay its dividend and where rising margins suggest the possibility of that dividend increasing over time, I’d pick ExxonMobil. Which is why I’m keeping this stock in my Dividend Income portfolio as of February 20, 2016. The shares pay a 3.6% yield. (The company has said that going forward it will reduce its recent massive share purchase program so that it will be targeted at keeping the share level constant.)