CEO says Exxon Mobil can be “successful” with $40 oil

Fuel Fix ^ | December 3, 2014 | Joshua Cain

[ncpatriot]

Does this mean our 401Ks (retirement) will lose money

[ontap]

When profits go down everything suffers for that business. Depending on your age you will be affected more if you are nearing retirement. If you are in the oil industry you should have been receiving record returns on your plan. The people affected the most is the ones who have been receiving large bonuses. Rex’s bonus probably went from 30,000,000 to 25,000,000.

[vette6387]

“Many of the gasoline taxes are a fixed rate per gallon.”

True, but here in California we have both a per gallon tax ( supposedly to fund road maintenance and construction) and the normal sales tax on the total price (including the per gallon tax). So I imagine as thirsty as Jerry the Fairy is for revenue, the slide in the price of gasoline isn’t good.

[Svartalfiar]

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.

I've worked several meeting/shows for several different oil/gas/fracking companies/groups. None of it was specifically confidential, but I'll keep this to some general knowledge.

Most of the cost for the shale plays comes from the initial lease/well exploration/drilling. Once the wells are completed, costs are very minimal to keep producing. Closing a well incurs a decent amount of cost. So, our production isn't going to decline much very quickly. New wells fall off fast, but then have a steady 10-15% output (of their original amount) for several years-decades after the initial 3-4 years.

If it does fall to $40-50/bbl, yea, you'll see new wells taper off fast. Small companies (especially exploration-related, not production-related) will likely fold/be absorbed by their bigger buddies. Output may fall 10-20% as the current wells mature, but we'll still be producing lots and lots of oil for the forseeable future. Certain plays may slow down, as they're more expensive/difficult, but the big ones (Bakken, Eagle Ford, Barnett, Permian mainly) will stay about the same.