Posted on 12/03/2014 1:58:41 PM PST by thackney
Exxon Mobil CEO Rex Tillerson said in an interview with CNBC Wednesday that the oil and gas giant could remain “successful” even if oil prices continued to plummet.
Tillerson said that because many of the company’s biggest projects take years to complete, Exxon Mobil tests its investment across a range of prices between $120 and $40 per barrel.
“All of the investment decisions we take have been tested across a range of pricing that accommodates these types of price swings,” Tillerson said. “What you do is ensure that you can be successful at the bottom of the price swing.”
Tillerson also noted that a lower oil price might “sort out” the market, edging out smaller unconventional companies that have taken advantage of the low barrier to entering the industry.
Analysts have reported that most U.S. producers may not have hit their break even points, even with crude oil priced below $70. West Texas Intermediate was priced at $67.98 on Wednesday, according to Bloomberg.
According to the International Energy Agency, just 4 percent of U.S. shale-oil producers would become unprofitable at prices below $80. In some U.S. shale plays, like the Eagle Ford Shale, the break even price is closer to $40.
There you go. Let’s try to hit that goal then!
Exclusive: New U.S. oil and gas well November permits tumble nearly 40 percent
http://www.reuters.com/article/2014/12/02/us-usa-oil-permits-idUSKCN0JG2C120141202
Dec 2, 2014
Plunging oil prices sparked a drop of almost 40 percent in new well permits issued across the United States in November, in a sudden pause in the growth of the U.S. shale oil and gas boom that started around 2007.
Data provided exclusively to Reuters on Tuesday by industry data firm Drilling Info Inc showed 4,520 new well permits were approved last month, down from 7,227 in October.
The pullback was a “very quick response” to U.S. crude prices, which settled on Tuesday at $66.88 CLc1, said Allen Gilmer, chief executive officer of Drilling Info.
New permits, which indicate what drilling rigs will be doing 60-90 days in the future, showed steep declines for the first time this year across the top three U.S. onshore fields: the Permian Basin and Eagle Ford in Texas and North Dakota’s Bakken shale.
The Permian Basin in West Texas and New Mexico showed a 38 percent decline in new oil and gas well permits last month, while the Eagle Ford and Bakken permit counts fell 28 percent and 29 percent, respectively, the data showed.
excerpted for Reuters
I can be much more successful at $30 oil, but it is a simple request sure to ignored.
ExxonMobil will survive at that price, many of the smaller independents will be selling assets to companies like ExxonMobil at that price.
They definitely play for the long-run gain.
“CEO says Exxon Mobil can be “successful” with $40 oil”
That’s the Spirit. Get tired of hearing how oil can’t work at XX price. BS. Make it work. Most everything else has to deal with competition, why not oil and oil production.
They know where it is and they’ll be back once oil rises again, as it inevitably will. Murphy Oil sent my father an $80 check every year for more than 20 years for exploration rights on some remote mountain land which he owned. They never sent an exploration crew. The check basically paid most of his property taxes.
A lot of US libs are “saddened” by cheaper oil.
It inspires the unwashed masses to go out and spew evil carbon from their pickups and SUVs.
If gasoline goes from $4.00 per gallon to $2.00 per gallon then the states and cities with sales taxes will see their revenues decline. LOL
Many of the gasoline taxes are a fixed rate per gallon. Some use percentage but it is a lesser portion of all the taxes.
I’ve got some 55’s begging to be filled at $1.50 a gallon...
You will notice he doesn’t claim they will produce the same amount as today, or invest the same amount in future production. But they won’t fail as a company.
Others will, and the US production will fall, then the prices will rise again, and some the ride continues.
Truth is they have no choice. There is a glut on the market. Some of the people who got in at $100.00 a barrel won’t make it!!!
I’m not sure what all the commotion is over the price of oil. Everyone’s looking at the price per barrel and forgetting about the consumption of barrels.
When the price goes way down, consumption goes way up. Simple supply and demand. So long as there’s profit, which there should be even at $40 a barrel, and the consumption rises to similar levels to offset much of the loss, oil will continue to flow.
What ever happens happens....no business is guaranteed a profit and they certainly aren’t immune to market forces and competition. The party is over....the survivors will be sorted out.
Just more proof that Rex and his crew knows a little more about this business than the so called expert analyst.
In my opinion t is long over due. When an adjustment is put off artificially it is usually pretty ruff on the border line companies. What is starting to happen is a price war...the true price of the commodity will eventually be determined. Fact is oil is not a scarce substance and the Saudies cost of pumping it isn’t any more than ten years ago. Fracking has lowered the cost in the states. It’s a buyers market!!
“Business Journalists” are only marginally smarter than general assignment reporters. They know how to reconcile a checkbook, whereas reporters can’t add 2 plus 2.
The only ones more stupid are sportswriters. They write only what they’re told to write.
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