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Exxon Mobil (XOM) CEO Darren Woods said the energy major will continue to pursue investments and M&A in oil and gas because "energy transitions take a long time," according to Bloomberg

Woods, speaking at the Barclays CEO Energy-Power Conference in New York Wednesday, said oil and gas demand would rise even as governments try to reduce use of fossil fuels, the news service reported.

That requires substantial investments, even as shareholders press the major energy companies to reduce spending and return cash to them, the executive said.

Bloomberg quoted Woods as saying that he expected consolidation among the shale drillers and that Exxon Mobil would be watching for acquisition targets.

Separately, analysts at Bank of America released a note saying that Wall Street is underestimating the cash that Exxon can generate in the coming years from operations and asset sales. 

Analyst Doug Leggate said Exxon's decision to spend aggressively now on mergers and acquisitions will pay off in the form of free cash flow in a few years.

The firm has a buy rating and $100 price target on the stock.

Exxon shares were up 1.1% to $69.32 Wednesday.