But buying reserves takes funds, same as drilling. That doesn’t change the point that cheap previous purchases or exploration are already past expenses. To stay in the business, you have to replace reserves and production declines eventually.
The key word is “eventually”.
History shows otherwise for companies with the financial wherewithal to take the downturns and to snap up reserves cheap via purchase rather than the drillbit.
My BD experience shows a pletHora of companies that utilize that strategy and it works.
If you are implying the downturn will never reverse, that is just flat wrong, as proven by history.
Your comments are most pertinent for some companies, but not all.