THE Exxon Mobil Thread pt 2 (merged)

[mos6507]

Why can't we just "drill, baby, drill" like your woman, Palin wants?

Gee, you'd think maybe we "can't drill our way out of this". Now, who coined that phrase?



The horror!

[SeaGypsy]

AW before it gets to capacity or willingness to transition by the mega corps, the assumption is that the oil price will continue to rise not just in proportion to dwindling supplies but heavily disproportionately as ELM and international markets battle it out for what's left as the sucking sound gets louder.
A reasonable assumption.

[Graeme]

Exxon deal highlights oil reserves issue

ExxonMobil’s acquisition of XTO Energy last year accounted for 80 per cent of the reserves it added in 2010, highlighting the difficulty oil companies are having in finding new sources of crude.

The world’s largest private sector oil company by market capitalisation said its reserve base increased by 3.5bn to 24.8bn oil-equivalent barrels at the end of last year. XTO, a US independent focused on shale gas production, accounted for 2.8bn of the new reserves.

The additions enabled Exxon to replace 209 per cent of production.

Barclays Capital noted that excluding the XTO acquisition, Exxon’s reserve replacement ratio would have been only 45 per cent.

“We think the poor organic replacement ratio could reignite the question among some investors whether Exxon acquired XTO purely for reserves and production growth,’’ said Paul Cheng, an analyst covering Exxon at Barclays Capital.

FT

[vtsnowedin]

[So can someone please explain to me. I can invest my money in a company, that can no longer continue to make at an increasing rate, the very product that it exists for. But for all purposes I know that it will slowly die in size by a few percent each year over the next 30 years, as it has over the last few years, with a negative return of 3%.

Or I can put my money into the bank earning a positive return each year, with no risk.

Don't worry Exxon will make as much money selling the oil on the back half of the curve as they did on the front side if not several times more. They may move five percent less product each year but so will everybody else and they will set prices at cost plus an obscene profit on every barrel.

[SeaGypsy]

One aspect I have seen very little discussion on anywhere is the fact that exploration techniques for oil/ gas and coal have been rapidly accelerating over the last ten years. I'm not sure on percentages, but I know guys working on sonar mapping both undersea and arial, they are still busy but not nearly as busy as they were 2 years to a year ago. One undersea worker told me they are pretty much done with mapping claimable areas accesible with current technology and are now working on an assumption of quantum improvement in deepsea drilling capacity. Put this together with current ELM factors in the ME, Latin America and SE Asia, we will soon have serious supply issues. I give it 2 to 3 years at best.

[mattduke]

I propose funding a study to figure out why nobody saw this coming.

[Plantagenet]

Why can't we just "drill, baby, drill"

Hi Moss: Thats an interesting question. I'm sure many people thinking about peak oil for the first time have that same question.

Exxon can't solve their problem by "drill baby drill" because we're five years past the peak of global oil production---there just aren't many large giant oil fields left to be found. However----and this may surprise you---- They also can't solve their problem by stopping drilling. If Exxon is going to remain an energy company, they have to continue to produce energy and that probably means more drilling but with less oil to show for it in the future.

Cheers!

[sparky]

.
@ Plantagenet
"If Exxon is going to remain an energy company, they have to continue to produce energy and that probably means more drilling but with less oil to show for it in the future. "

That's the main scenario , more search giving an ever decreasing amount from lesser finds
the cheap oil was based on a few super giants fields,

As for the oil companies , they are reinventing themselves as specialized contractors for the national oil companies , as was seen in the great Iraqi auction
the arctic reserve is better left in the fridge for when things are going to be dire
why suck all of it in an age of wastefulness , keep it for the kids
.

[Pops]

Of course the WSJ says Exxon only replace 95% of production last year.

'That ain't terrible' a cornie might say... except, without buying XTO Energy, their replacement would have only been 45%.

The issue of how the world’s biggest oil companies will increase reserves has become increasingly important amid the resource nationalism that has put up barriers to new sources.

Link
I started a thread about nationalizing oil a while back...

[Pops]

The other thing I thought about was that Chesapeake sold off it's Fayetteville field (nat gas) because it couldn't afford the cost of fracking....

It's buying up oil plays in the Bakken!

[rockdoc123]

The other thing I thought about was that Chesapeake sold off it's Fayetteville field (nat gas) because it couldn't afford the cost of fracking....

It's buying up oil plays in the Bakken!

to be more precise it was because the breakeven cost of Fayetteville shales is not much different from current Henry Hub. The Bakken fraccing costs are just as high but because the liquid margin is much higher it makes more sense to concentrate on liquid rich plays.

Although a lot of the shale gas is economic below $4/MCF there is just as much (eg. Horn River, Montney) that needs higher prices. Hence you seen producers looking for other market solutions (LNG, GTL). If you are in the right spot where the gas can have a very high liquids content (eg Eagleford) then your breakeven cost is well below current nat gas prices.

[Frank]

That is because it is all locked up in ANWR.....govt's will submit, no oil will be found there will be blood.

Don't worry---Obama will protect that frozen tundra from being ravished by the drills of those rascally evil oil companies!!!!

Who needs those good-paying jobs in the oil biz anyway. Aren't we all happier knowing that all that oil under the ground in ANWR is safe and sound and protected from being disturbed as long as Obama is president!!!!

Don't you find it strange that when both houses and the executive branch were totally locked by by conservatives (for 6 years under the worst of all presidents), that even then they didn't open ANWR to drilling. And now it is all Obama's fault?
The inconsistencies are starting to make you look bad. Maybe it is time to become a bit more logical about your anti liberal rants.

Plant hates Obama and takes shots whenever he can, regardless of whether or not they're based in reality. They generally aren't... BTW, there's not that much oil locked up in ANWR anyway.

[Keith_McClary]

Download 43 page PDF from:
The Outlook for Energy

Future historians will refer to the great bounce of 2012.

[Kristen]

Maybe because oil is inelastic people will get use to 5 dollar gasoline, or ten?

[vaseline2008]

Exxon to spend $150B over 5 years to find oil, gas

Exxon Mobil Corp., Chevron Corp., BP and Royal Dutch Shell all produced less crude last year than in the prior year. They're struggling to tap new sources of oil fast enough in an environment where big finds are rarer and costlier to exploit. Potential fields lie deep under the seabed, or in shale rock formations that require expensive technology to crack open. When Exxon can't find oil fast enough, it is stuck with existing fields where production is declining.

[MD]

gee, that investment makes their 300 million algae research effort look pretty pitiful.

Their LNG tanker fleet pales in comparison too.

If EM is really queued up to dump $150b into oil development I guarantee there will be a return on that investment. That's their whole bankroll.

[vtsnowedin]

gee, that investment makes their 300 million algae research effort look pretty pitiful.

Their LNG tanker fleet pales in comparison too.

If EM is really queued up to dump $150b into oil development I guarantee there will be a return on that investment. That's their whole bankroll.

Well Duh!! An experienced corporation chooses to invest in more crude oil exploration vs. R&D in algae oil. Perhaps they have made the wrong bet, but do you want to bet against them?

[pstarr]

gee, that investment makes their 300 million algae research effort look pretty pitiful.

Their LNG tanker fleet pales in comparison too.

If EM is really queued up to dump $150b into oil development I guarantee there will be a return on that investment. That's their whole bankroll.

Well Duh!! An experienced corporation chooses to invest in more crude oil exploration vs. R&D in algae oil. Perhaps they have made the wrong bet, but do you want to bet against them?

he has already

[dissident]

gee, that investment makes their 300 million algae research effort look pretty pitiful.

Their LNG tanker fleet pales in comparison too.

If EM is really queued up to dump $150b into oil development I guarantee there will be a return on that investment. That's their whole bankroll.

I am not so sure the board of Exxon is composed of genius material. They just keep doing what they did before and hope it produces the same result. A lab rat could do more. Eventually, and this would be in the current period, this sort of BAU reflex fails. After their admission that 2012 will see production declines, it will most likely be that the next five years will see the same pattern. Then there will be lots of agitation from the shareholders about $30 billion per year being wasted. The shareholders are unlikely to be peak oil believers since peak oil is for the "fringe", so they will not attribute the declines to cold hard reality but will think it is management incompetence. Maybe by 2025 the world will have woken up from the current delusion that it is in.

[prajeshbhat]

I am not so sure the board of Exxon is composed of genius material. They just keep doing what they did before and hope it produces the same result.

Exxon Mobil Corp., Chevron Corp., BP and Royal Dutch Shell all produced less crude last year than in the prior year.

Well, they don't have to do anything. With the oil-prices continuously rising and everything.

Take a look.