Are you talking about these companies? They even figured out how to turn a profit; stop trying to replace their reserves. Cut a $1 trillion out of Capex. Of course that means that they are going out of business, but the next quarters conference call will be happy tales, and the managements bonuses will be OK for another quarter. They definitely know how to prioritize.
once again you post a document with no reference, so no idea how the numbers were calculated nor what is included. The E&Y study is detailed, garnered from company SEC filings which makes it easy to analyze.
EOG, a true shale player had 2016 revenues of 5,259 MM US, Production costs of 1,917 MM US, exploration expense of 126 MM US which results in pre-tax cash based income of 3,216 MM before taxes and 2,801 MM after taxes. It is only when you add in DD&A and impairments which are paper adjustments (and impairments are temporary) that they end up with a negative result of operations.
Pioneer another pure shale player had 2016 revenues of 3,108 MM US, production costs of 717 MM US, exploration expenses of 119 MM and G&A etc of 304 MM resulting in cash based income of 1,968 MM before tax and 1,563 MM after tax. Again it is only after you add in the paper adjustments of DD&A and reserve write downs (impairments) that you end up with a negative result of operations.
The only other pure shale player in your list is Southwestern and in 2016 they had a cash based results of operations of 574 MM
As I’ve said before when you look at your own home budget do you add in the depreciation on your vehicle or the change in the value of your home? Of course not. All you look at is your revenues from employment and investments minus your costs. That is the same as the cash based view of these companies and is appropriate in determining whether they are going concerns.
Not replacing their reserves you say? Horseshit.
In 2016 EOG replaced 183% of its produced reserves and 194% when revisions are excluded, Pioneer 128% of its reserves and 253 % when revisions were excluded.
For the top 50 companies, oil production replacement rates for the last 5 years have been 142% and 190% if revisions are ignored.
As an example, the company everyone likes to hate CHK started the year with 497 MMB and ended the year with 625 MMB, a 25% increase.
But don't let the facts stop you from posting random documents off the internet