So Big Oil isn’t going out of business any time soon? They’re actually taking a long term view of the business? Imagine that!!!
CEO says Exxon Mobil can be “successful” with $40 oil
http://www.freerepublic.com/focus/f-news/3233422/posts
December 3, 2014
Note, I read “sucessful” to mean survive. That won’t be the case for all the little ones that took on too much debt. They will be selling assets to companies like ExxonMobil. My past business with them showed risk management may be a higher concern than production.
Also keep in mind, ExxonMobil refines more than twice the amount of oil they produce. They buy more oil than they produce themselves.
http://fuelfix.com/blog/2014/12/18/exxon-mobil-shows-why-u-s-oil-output-rises-as-prices-plunge/
Existing wells remain profitable even as benchmark crude futures hover near the $55-a-barrel mark because operating costs going forward are usually $25 or less, Tom Petrie, chairman of Petrie Partners Inc., said in a Dec. 15 interview on the Bloomberg Surveillance television program.
That’s why prices that have tumbled 47 percent from this year’s peak on June 20 haven’t prompted any American oil producers to shut down wells, said Petrie, a U.S. Military Academy at West Point graduate who has advised Saudi Arabia, Alaska and the U.S. government on energy issues.
The average cost to operate an existing well in most parts of the U.S. “is about $20 a barrel,” Petrie said. “It might be $5 higher or it might be $5 lower, that’s the out-of-pocket costs that we’re talking about. Until you dip into that and start losing money on a cash basis day in, day out, you don’t think about shutting in” wells.
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Big difference over not drilling new wells versus keeping the existing ones flowing.
Imagine that!!!
XOM and its predecessors back to Standard Oil have not reduced a dividend in 100 years, much less go out of business.
That includes a depression, a great recession, 5 oil busts, and a meddlesome federal government.