[peterjames]

I was just reading the financial results for BHP, and obviously not in the league of the big boys, but they have a fairly decent sized oil business. I noted that even at high oil prices, they have allocated $36 billion in assets to oil, and made nearly $3 billion in ebit for the half year (which for ease sake, they will make $6 billion for the full year). But on top of everything, they also invested $3.6 billion back into the business in the last 6 months. The profit for the 6 months was $3 billion, but the cash flow was minus $600 million. Not a great business for shareholders if in 20 years time, they have $100 billion dollars in oil rigs / equipment etc, and they realise it is worthless if theres no oil to get out.

[KaiserJeep]

The long term performance of "Big Oil" is far more favorable than that. Perhaps it is time that I remind you that "Big Oil" is the largest seven energy companies in the world. They are all publicly held, and the demographics of the "Big Oil" investors are known to be:

1) UK retirement funds. 42%
2) US retirement funds. 40%
3) Everybody else. 18%

Do you have something against elderly retired folks? I am 3-5 years away from retirement and heavily invested in the more risk-free options in my 401K. I probably own significant amounts of "Big Oil" stocks through the institutional funds in my 401K plan (I really have no way to know for sure). I do know that the funds are earning modest but steady returns.

You have something against elderly retirees, or wannabees like me?

[ROCKMAN]

An there's the big distinction in the oil pubcos today: stable stock prices with acceptable dividends for some and potential growth in stock value with little or no meaningful dividends for others. Which is why the ExxonMobil's will acquire other companies as aggressively as possible to maintain that stability and the folks trying to add reserves with the drill bit will keep risking their capex. Both strategies appear to be heading for a brick wall IMHO. OTOH what other choices do they have if they want to continue to exist?

[peterjames]

Kaiser, it probably all depends when you manage to sell out off the giant oil ponzi scheme. I was just reading Exxons last set of results, and they appear to be pretty much of the same (good profits, but requiring all those to be reinvested).

[KaiserJeep]

Like 90+% of the people who actually have their own retirement funds, and who don't plan to be Social Security drones, I have little control over what stocks are in my plan. I also have no way of selecting any investment options that might be free of energy stocks. We pay for fund management. Once I retire, I will have some more control, but meanwhile things work the way my employer wants them to work, without me devoting much thought to them.

[ROCKMAN]

Peter - Good point. I've made that case before when some folks bitched about the size of XOM profits. Which really aren't profit but cash flow. After paying dividends XOM's revenue funds all their operations. essentially they are one of the biggest "recycling" companies on the planet...recycling revenue. As I joked the other day it is not like that group that ate their dead team mates when they crashed into that frozen mountain top. XOM eats its own leg. But it's OK as long as it keeps growing it back. But the problem does develop when they can't regenerate itself (its reserve base) through acquisitions or with the drill bit.

[BobInget]

Oil companies like most major corporations reinvest almost all profits in some way or other to avoid taxes.
When organic growth (drill bit) becomes too expensive, most energy companies will buyout or merge
with juniors even equals to improve reserves. This is known as drilling for oil on Wall Street.
If you are a young person, growth should be your prime consideration. Later in life look for solid dividends
backed by companies that have either given up on growth (limited partnerships) or have simply scaled back on exploration and concentrating on production. Look for companies with increasing dividends .
Better to issue taxable dividends that support share prices than pay out corporate taxes.
Watch when public corporations issuing new stock. Traders will instinctively sell off any company that does this despite the fact that they are taking on no new debt. Never buy on the first news day.

Another method I used thirty or forty years ago, "dividend reinvestment plans' "DRIPS" this permits
a self employed person to not only automatically reinvest dividends, but buy shares with zero commissions.
Big corporations love these too because they are simply issuing stock instead of paying out cash.
A person with no special IRA still pays taxes but only on dividends not capital gains, unless one decides to liquidate all or part of that portfolio.

Most importantly, corporations, despite propaganda, are NOT people. Human life expectancies are measured in decades not hundreds of years. Peak oil, climate change, are real, it's true. Find a few companies you feel are managed well enough to survive your lifetime and probably that of your youngest.

There's tons of money being made on twin threats GW and PO. You choose; buy guns and ammo or heat and power with alternative energy and or find North American companies who are on to cutting edge energy solutions, if city bound.

[Outcast_Searcher]

When liberals whine about fossil fuels at the same time they fly all over the planet to attend AGW mitigation conferences, or publicly whine about the consumption of fossil fuel -- that says it all to me.

It's like Al Gore for the masses (or big government in general). Do as I say, but not as I do.

Don't get me wrong -- although I acknowledge our understanding of climate modeling is far from mature -- the data showing accelerating AGW effects we should all be concerned about are convincing over the past 5 decades.

OTOH, when you can't get people to save 30 years ahead for THEIR OWN RETIREMENT, how can you get them to forego lifestyles they want to help the planet in a century or two? For the most part, it seems they are NOT going to volunteer for that, and in fact will fight it in their own lives, even as they extol its virtues to score political points.