Energy Sector

[bizaro86]

3 hours ago, Pelagic said:

Out of pure curiosity does anyone know why Exxon uses Moebd instead of the more common formatting of Mboed or mmboed? I figured it was a typo at first but it seems they use it in everything.

 

Exxon does things the Exxon way. Even if there's no practical difference they'll never ever change because that's the Exxon way.

[Stuart D]

1 hour ago, bizaro86 said:

 

Exxon does things the Exxon way. Even if there's no practical difference they'll never ever change because that's the Exxon way.

One of my mates attended an Exxon Christmas party as a +1. Because he was an outsider they made him sit through a safety briefing. The safety briefing was a sermon glorifying The Exxon Way with bookends of the bathrooms & fire exit locations.

[SharperDingaan]

On 12/12/2024 at 8:58 PM, Dalal.Holdings said:

The thesis folks had was when the majors acquire the small shale players (like Exxon and Pioneer), they would show more restraint and rationalize production so that the U.S. supply boom that has driven prices down would end. Looks like Exxon is not going down that route…

 

Lower production costs = higher margins at current prices, and shorter payback periods. At payback periods < 1 year; maintenance capex is self-funding, as current spend has been recovered by year-end; thereafter the well produces at marginal cost, and lowers average production cost across the reservoir (ie: USD 35/bbl). Reduce the depletion rate, find a home for the rising gas/water cut, and that marginal cost production will also continue for quite some time. 

 

Drill baby drill, DOES mean more drilling, but NOT more NET production. Tier 2 inventory is not as prolific as Tier 1, typically depletes faster, and has a higher gas/water cut. To simply maintain an existing production level, the hamster wheel has to speed up, which means more drilling. Drilling technology advancements can slow it down for a time, but it has limitations.

 

The self-fund thing ???  If the payback period is 1 yr, 2024 maintenance capex is 400M, and 2025 maintenance capex is 440M  ... the actual 2025 new cash requirement is only 40M (425-400), and that cash saving can go into debt reduction, buy-back, M&A, dividends, etc.  

 

SD

 

 

 

Edited December 16 by SharperDingaan

[Spekulatius]

One thing that should be noted is that low energy prices is probably the best way to hurt all those shithole countries that are enemies of the west - Venezuela, Iran, Russia. Those three states run on oil exports and the lower energy prices , the less funds they have to do their things.

 

So besides  benefiting US consumers, low energy prices have incredible geostrategic benefits for the US and the West. It’s even better the US does continue the energy transition (using less oil) while pumping and hence exporting more. Canada should do the same.

 

The idea that reducing oil output would somehow help the green revolution just does not make sense. I think the US should continue to foster the energy transition in a measured way and use less energy but should pump and export more oil to anchor prices (including green energy) at relatively low cost to consumers but also hurt our oil exporting adversary’s.

 

Now China would also benefit from this, but they are already far ahead in the EV transition anyways and use more coal than oil and gas and even that is declining quite a bit.

Not that great for energy stocks,  and very low prices will eventually lead to lower output, but I am pretty sure that oil prices of $60/ barrel would probably not lead to an output decline with current economics in both deep water and shale.

Edited 13 hours ago by Spekulatius