From my experience when the sentiment is so negative in the oil patch it's probably time to invest if your horizon is long enough. I bought som XOM earlier in the week. Sometime in the next decade it could double and pay 3.5 percent dividend along the way. When the blue chips are down buy em.
Houston..we have a problem....
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Last: 9 days ago by insulator_king
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along with the required 2 recently hired female "God only knows what they do" types
That's actually pretty funny and true.
I find it annoying how much some of the old guys bash the young guys.
If I go to a shop and look at pumps or casing or plugs or whatever it may be, I'm not going to be an expert on them or understand every application of every product after my first visit. For sure there are young people who are lazy and I am not defending them - but there are older folks who are cruising too. I don't think generalizations are fair for either group.
I deal with older field personnel all the time who think I'm an idiot for wanting to capture the decline of horizontal wells. They want to test wells once per month because that's been "industry standard" for the vertical wells they've worked on the last 20 years - wells that aren't declining much month to month. Who cares if we have spent $2MM extra on a frac - and believe me, that has been very well explained.
That negative attitude is very frustrating to deal with - probably should bite my tongue when I see it on a forum but the aforementioned is one example of how poor attitudes impact me day to day and impact our company in a very negative way. I also work with folks who don't make any attempt to learn new software. They spend 3 days plotting well to well comparisons in excel when they could spend 3 seconds in a different software connected to a well managed database but they prefer their method so they are "busy" all the time.
I agree we are all in this together - the OPs recent post was uncalled for IMO. Last thing I have to say about that.
I bought DTO back in August and again two to three weeks ago (sold prematurely for a nice gain). Didn't see us getting to mid 40s or below again but not too shocking.
I predict the reaction to a few rigs being picked up/Iran/China is overblown. By the end of the year, our production will start to show downward signs - the price won't shoot up but it will stabilize and move up - likely back to the $60-$65 range. Any ME event will then become impactful to price again. Right now, small things in the ME don't have much impact on price IMO. You never hear Iraq mentioned in relation to oil price anymore - pretty sure things didn't become all rosy over there since $90 oil last year when every move in price was attributed to instability. It is obvious oversupply is dominate over all other factors - it was obvious to some people including the OP when this thread was started that oversupply was an impending issue. When oil started showing signs of weakness and ME events quit impacting price, that was my cue.
Hard to see a big run up next year because we know companies will pick up rigs at $60-65 oil. If service companies are losing money with current margins, their prices will have to come back up eventually. Then activity will slow even more and price can come up - those kinds of things take a while to flesh out. What no one has mentioned in the long term equation is international unconventional resources. The next run up will likely see more frac crews overseas. I have to believe Saudi has plenty of shale that filled up their reservoirs - correct me if I am wrong geologists.
This thread could use some more predictions on the record. The safety talk is boring - we all know safety is very important and in some cases it is overemphasized.
If I go to a shop and look at pumps or casing or plugs or whatever it may be, I'm not going to be an expert on them or understand every application of every product after my first visit. For sure there are young people who are lazy and I am not defending them - but there are older folks who are cruising too. I don't think generalizations are fair for either group.
I deal with older field personnel all the time who think I'm an idiot for wanting to capture the decline of horizontal wells. They want to test wells once per month because that's been "industry standard" for the vertical wells they've worked on the last 20 years - wells that aren't declining much month to month. Who cares if we have spent $2MM extra on a frac - and believe me, that has been very well explained.
That negative attitude is very frustrating to deal with - probably should bite my tongue when I see it on a forum but the aforementioned is one example of how poor attitudes impact me day to day and impact our company in a very negative way. I also work with folks who don't make any attempt to learn new software. They spend 3 days plotting well to well comparisons in excel when they could spend 3 seconds in a different software connected to a well managed database but they prefer their method so they are "busy" all the time.
I agree we are all in this together - the OPs recent post was uncalled for IMO. Last thing I have to say about that.
I bought DTO back in August and again two to three weeks ago (sold prematurely for a nice gain). Didn't see us getting to mid 40s or below again but not too shocking.
I predict the reaction to a few rigs being picked up/Iran/China is overblown. By the end of the year, our production will start to show downward signs - the price won't shoot up but it will stabilize and move up - likely back to the $60-$65 range. Any ME event will then become impactful to price again. Right now, small things in the ME don't have much impact on price IMO. You never hear Iraq mentioned in relation to oil price anymore - pretty sure things didn't become all rosy over there since $90 oil last year when every move in price was attributed to instability. It is obvious oversupply is dominate over all other factors - it was obvious to some people including the OP when this thread was started that oversupply was an impending issue. When oil started showing signs of weakness and ME events quit impacting price, that was my cue.
Hard to see a big run up next year because we know companies will pick up rigs at $60-65 oil. If service companies are losing money with current margins, their prices will have to come back up eventually. Then activity will slow even more and price can come up - those kinds of things take a while to flesh out. What no one has mentioned in the long term equation is international unconventional resources. The next run up will likely see more frac crews overseas. I have to believe Saudi has plenty of shale that filled up their reservoirs - correct me if I am wrong geologists.
This thread could use some more predictions on the record. The safety talk is boring - we all know safety is very important and in some cases it is overemphasized.
XOM cuts their buyback to 500M/quarter. It would have been nice to spend the 5B in buybacks now when prices are low than having an automatic buyback plan.
Some people speculating that XOM is trying to save cash for acquisition.
There is cost cutting going on at XOM but no indication there will be layoffs. I've heard it's hard to lose your job at XOM. Plus with the moves to the Woodlands causing people to leave and many retirements coming, I'm not sure they can afford to lay off people.
Some people speculating that XOM is trying to save cash for acquisition.
There is cost cutting going on at XOM but no indication there will be layoffs. I've heard it's hard to lose your job at XOM. Plus with the moves to the Woodlands causing people to leave and many retirements coming, I'm not sure they can afford to lay off people.
One thing I've learned in oil and gas is there are a lot of passive aggressive egos fueled by insecurity. Olds *****ing about young guys. Young guys complaining about olds taking forever to do simple work. Field guys finding whatever excuse possible to be offended by engineers. Engineers treating field guys as mindless slaves.
Jesus, I just want to do my job as good as I can. I'm not perfect, but could we just cut the unnecessary tension and posturing out of it. I just want to make oil.
And jake... While that makes sense from a pure investment perspective. The answer to your question is the same as the answer to why oil companies don't shut off all of their production in a low oil price environment. Or why, oil companies will find shortcuts to fix problems that may not be as good of a solution in a low oil price environment (such as not replacing the entire rod string when you have a rod part).
Jesus, I just want to do my job as good as I can. I'm not perfect, but could we just cut the unnecessary tension and posturing out of it. I just want to make oil.
And jake... While that makes sense from a pure investment perspective. The answer to your question is the same as the answer to why oil companies don't shut off all of their production in a low oil price environment. Or why, oil companies will find shortcuts to fix problems that may not be as good of a solution in a low oil price environment (such as not replacing the entire rod string when you have a rod part).
I saw a few CVX/BP hands on here. How are the secondees going to be handled?
I'm not upstream, but I'll vouch for the cost cutting and no lay offs (as of now). Although most the people coming from fair fax are downstream not upstream.
Been reading about the Texas oil boom and busts of the 1930s. Oil was discovered in East Texas and you had a waive of people come into the area to drill and oil dropped to $0.02. The governor had to even deploy troops to stop people from drilling. Before all this, the industry worried about oil shortage and then that problem turned into over-supply. It took WW2 to get prices up.
If you fast forward to now, in the early 2000s, the industry feared a shortage which now has turned into over-supply. Is it going to take WW3 to get prices up?
If you fast forward to now, in the early 2000s, the industry feared a shortage which now has turned into over-supply. Is it going to take WW3 to get prices up?
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I'm not upstream, but I'll vouch for the cost cutting and no lay offs (as of now). Although most the people coming from fair fax are downstream not upstream.
I'm in downstream as well. I know that we are being pushed to find cost savings/cuts and that there will definitely be some layoffs. It won't be to the magnitude of upstream, but there is definitely room to reduce size.
Downstream is the red headed step child of the industry. When oil prices are high and downstream margins are low, downstream is pushed to reduce costs while upstream sprays money out of their cash fire hose. When oil prices drop and downstream is generating very strong profits, they are again pushed to cut costs and reduce staff...maybe even moreso than when refining margins are lower.
Agreed.
Downstream is great at generating cash, but you aren't going to create record profits or anything doing so.
But if you look at a company like Shell this last quarter...Downstream saved them. Their earnings would have been terrible if not for good refining margins helping bridge the gap.
Downstream is great at generating cash, but you aren't going to create record profits or anything doing so.
But if you look at a company like Shell this last quarter...Downstream saved them. Their earnings would have been terrible if not for good refining margins helping bridge the gap.
Downstream is saving all the majors. Did any of their upstream units generate a profit this quarter?
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Downstream is saving all the majors. Did any of their upstream units generate a profit this quarter?
1 billion vs. 4.7 billion same quarter last year which is actually an improvement over Q1.
Is that XOM? Are they the only major with an upstream profit?
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Is that XOM? Are they the only major with an upstream profit?
That's what Shell reported.
XOM reported 2 billion in upstream.
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Been reading about the Texas oil boom and busts of the 1930s. Oil was discovered in East Texas and you had a waive of people come into the area to drill and oil dropped to $0.02. The governor had to even deploy troops to stop people from drilling. Before all this, the industry worried about oil shortage and then that problem turned into over-supply. It took WW2 to get prices up.
If you fast forward to now, in the early 2000s, the industry feared a shortage which now has turned into over-supply. Is it going to take WW3 to get prices up?
Dan, it's the every 20 year boom and it has been dead on. It takes about 20 years to deplete fields. During that time prices are low and there isn't much drilling or discoveries made. How might horizontal, long lateral wells fracked over a mile change things? Cognitively I think the cycle should shorten meaningfully since depletion occurs in 4 years rather than 20. But I am always mindful of these dangerous words "this time it's different". Thoughts?
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I saw a few CVX/BP hands on here. How are the secondees going to be handled?
Secondees as in contractors?
A secondee would be, for example, Exxon employees filling operator positions on Gorgon.
Can some of you guys help explain something to me? OPEC was pretty much created because the host countries felt the major companies were selling their oil too cheap helping the West. By the 70s, the major companies were kicked out so they had to go searching for oil all over the world. The high cost of crude actually helped them pay for this and drill the North Slope. Why were the majors keeping prices down before then? After WW2 every country knew the importance of oil so were western governments forcing them to keep it low to build up their economies?
Also looking at XOM's historical chart, when crude crashed in late 1985-1986, the stock price didn't. It actually went up and doubled. I know Houston's economy sucked then but why did XOM stock rally. CVX also was in rally mode. Even Exxon Valdez didn't cause the stock to fall much. Can you guys help explain those times for me? Thanks.
Also looking at XOM's historical chart, when crude crashed in late 1985-1986, the stock price didn't. It actually went up and doubled. I know Houston's economy sucked then but why did XOM stock rally. CVX also was in rally mode. Even Exxon Valdez didn't cause the stock to fall much. Can you guys help explain those times for me? Thanks.
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A secondee would be, for example, Exxon employees filling operator positions on Gorgon.
Yes as in BP employees working in CVX offices.
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Can some of you guys help explain something to me? OPEC was pretty much created because the host countries felt the major companies were selling their oil too cheap helping the West. By the 70s, the major companies were kicked out so they had to go searching for oil all over the world. The high cost of crude actually helped them pay for this and drill the North Slope. Why were the majors keeping prices down before then? After WW2 every country knew the importance of oil so were western governments forcing them to keep it low to build up their economies?
Also looking at XOM's historical chart, when crude crashed in late 1985-1986, the stock price didn't. It actually went up and doubled. I know Houston's economy sucked then but why did XOM stock rally. CVX also was in rally mode. Even Exxon Valdez didn't cause the stock to fall much. Can you guys help explain those times for me? Thanks.
I got some answers to my questions regarding XOM stock performing well in the 80s. With the Iran/Iraq war, oil prices shot up which also increased production. That gradually caused price to fall but also preparing for Iran and Iraq to come back online. XOM though was drilling in Alaska in Prudhoe Bay where the reserves were double that of East Texas. Even though price was down, the addition of new reserves might explain why the stock was strong.
After that, Sadaam who thought his Arab friends got rich on his expense wanted loans forgiven. When they said FU, he invaded Kuwait.
After that, Sadaam who thought his Arab friends got rich on his expense wanted loans forgiven. When they said FU, he invaded Kuwait.
The majors, mid-majors, etc don't collaborate to control the price of oil. If they did, the anti-trust charges would be unpleasant to say the least.
Not now but before OPEC, the major companies at the time did. What was good for the oil companies was good for the United States so they ignored it.
There are way too many oil producers and purchasers to ever control the price of oil. It's free market all the way. The only possible interference in the free market could only come between an American president and Saudi but even then it's effects would be temporary.
Chinese PMI lower than expected coming in a 2 year low.
quote:What's unexpected is when they are somewhat honest.
Chinese PMI lower than expected coming in a 2 year low.
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Chinese PMI lower than expected coming in a 2 year low.
Ouch. Not what I wanted to hear. Oil will definitely be trading down tomorrow.
Down another 1.5%. Seems like we are destined to test the 2009 low.
New lows in the premarket for XOM and CVX. Oil is down 20% in July alone. 3rd quarter earnings are going to be just as crappy or worse.
Tanking.
If Brent heading below $50, what is the next support level?
zero
I guess it's time to bring this up again:
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