[GHung]

Shell, BP and Others to Report Earnings, Reveal What Role Lower Crude Prices Played On Results

By
Justin Scheck

LONDON—In the coming days, the world’s biggest publicly traded oil companies will report fourth-quarter earnings, offering the best look yet at the bite lower crude prices have taken out of Big Oil.

For BP PLC, lower oil prices are just one headwind. A federal trial now under way in New Orleans could levy penalties of as much as $13.7 billion for the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. Meanwhile, BP owns nearly 20% of Russian producer OAO Rosneft. Kremlin-controlled Rosneft faces Western sanctions...... (log in or subscribe)

http://www.wsj.com/articles/big-oil-fac ... 1422395792

Just a snippet from the WSJ. It'll be interesting to see what effect price drops have had so far on the majors, and how they plan to respond. I've seen rumours of mergers and divestitures, major layoffs, etc.. Maybe you oil patch folks can weigh in. Tough time to be Big Oil?

[GoghGoner]

So far, it has been the oil services companies that have taking the hit. Transocean, provider of deep sea drilling rigs, for example, is down over 60% yoy. The oil majors like XOM are reportedly in a good position to weather low oil prices for years.

[ROCKMAN]

Ghung - In a way not necessarially that bad a time for Big Oil. In some ways it can also have some very nice silver linings. But Little Oil is going to take the big hit.

Additionally you have to look at the components of those companies. ExxonMobil (the corporation) will survive just fine. In fact, it’s probably licking its lips waiting to swoop in and gobble Little Oils as times get worse. It’s generally impossible for Big Oil to replace its depleting reserve base with the drill bit. Some years ago when ExxonMobil acquired XTO more than 80% of their reserve gain that year came from the acquisition and not by drilling new wells. Most of the “hit” inside XOM will be on the staff. But mostly the exploration side. If they do some big acquisitions they would actually add staff on the production side. Same true for Big Service Company: they’ll start acquisitions of the wounded also. Consider Halliburton gobbling up even Big Service Baker Hughes. There are 102 VP’s running different divisions within BHI…wanna guess how many of them have a counterpart at H? Wanna guess how many VP’s it takes to run one division? LOL.

The real devastating pain will hit Little OIL including the Little Service Company. And you outsiders will seldom hear about the specifics of that body count. Most will have never heard the names of the Little Oils and Little Services. But collectively it could amount to a truly staggering body count if prices stay low enough long enough.

And the shareholders? Screw them: you pays your money and you takes your chances. LOL. Shareholders don’t disappear…just the names change. And some optimists will start gobbling up those lower priced shares at some point hoping to time the swing back to better times.

[BobInget]

Black gold in Virginia?: The Obama administration is proposing to allow offshore oil and gas drilling in the Atlantic, including in areas off the coast of Virginia. State officials support the plan, but environmentalists plan to fight it. (Daily Press)

Oil is so plentiful it should be rationed.