[misterno]

When I look at the income statements and balance sheets of these 2 companies I do not see a huge drop. It seems like they are using low oil price as an excuse to lay off people

What is surprising is that their diversification of investments are all in energy field but energy prices are dropping accross the board whether it is oil or LNG or NG or solar, they are all dropping.

So I wonder how did they manage all these dropping prices not to effect their bottom line? Is it their hedging strategy where they sold off oil already at higher prices is it because they laid off so many people, or something I do not see?

Any comments will be appreciated.

[AdamB]

When deciding to go ahead with a project, make sure it can withstand your IRR targets even if oil hits $10/bbl. While idiot companies that attempt to borrow themselves into growth occasionally succeed, those betting on sure things always do. Older companies know this. Boomer companies, not so much.

[misterno]

$this->bbcode_second_pass_quote('AdamB', 'W')hen deciding to go ahead with a project, make sure it can withstand your IRR targets even if oil hits $10/bbl. While idiot companies that attempt to borrow themselves into growth occasionally succeed, those betting on sure things always do. Older companies know this. Boomer companies, not so much.

[ROCKMAN]

"It seems like they are using low oil price as an excuse to lay off people". They never need an excuse to lay folks off...never have...never will. LOL. The only folks XOM management has to justify its position is to the board of directors who, in turn, justify their actions to the major shareholders. And it's the board/shareholders that would be DAMANDING layoffs.

As has been said many times: it ain't personal...just business.

[misterno]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;It seems like they are using low oil price as an excuse to lay off people". They never need an excuse to lay folks off...never have...never will. LOL. The only folks XOM management has to justify its position is to the board of directors who, in turn, justify their actions to the major shareholders. And it's the board/shareholders that would be DAMANDING layoffs.

As has been said many times: it ain't personal...just business.

[tita]

$this->bbcode_second_pass_quote('misterno', '
')well so what were their excuse for laying off people?

[ROCKMAN]

misterno - Again no excuses...just a reason: lower capex spending requires fewer employees. IOW why pay anyone a salary when there's no work for them to do. After all those aren't govt jobs. LOL. Companies pay very good salaries when there is a high demand. And then lay you off when the need disappears. If you can't handle that dynamic then you have obviously chosen the wrong career path.

And how do they survive: because they are huge corporations with $billions in steady income regardless of the price of oil/NG. It really isn't that complicated. But that stability due to mass also hurts them: they are so large and produce so much it's essentially impossible for them to develop enough new reserves with the drill bit as they produce every year. Big Oil's primary growth mechanism is the acquisition of smaller companies. And in the last year a very target rich environment has developed. Which is another reason (and not an excuse) for reducing staff: as they acquire smaller companies they will need to absorb some of those employees for the sake of the continuity of operations...they need to keep the folks that know how to run those new operations.

Back some years ago ExxonMobil acquired XTO. That one acquisition represented more then 80% of XOM's reserve additions that year. And guess what: they retained a fair number of XTO employees.

[kublikhan]

$this->bbcode_second_pass_quote('misterno', 'W')hen I look at the income statements and balance sheets of these 2 companies I do not see a huge drop.

[ROCKMAN]

K - True but I don't think most understand what a "loss" means on a company's SEC report. I won't explain: easily learned on the web...look up "paper loss". It's not the same as one losing their wallet with $500 in it...they lost $500. XOM et al did not lose wallets with $billions in them. LOL.

[AdamB]

$this->bbcode_second_pass_quote('misterno', '')$this->bbcode_second_pass_quote('AdamB', 'W')hen deciding to go ahead with a project, make sure it can withstand your IRR targets even if oil hits $10/bbl. While idiot companies that attempt to borrow themselves into growth occasionally succeed, those betting on sure things always do. Older companies know this. Boomer companies, not so much.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('misterno', '&')quot;It seems like they are using low oil price as an excuse to lay off people".
$this->bbcode_second_pass_quote('ROCKMAN', ' ')They never need an excuse to lay folks off...never have...never will. LOL. The only folks XOM management has to justify its position is to the board of directors who, in turn, justify their actions to the major shareholders. And it's the board/shareholders that would be DAMANDING layoffs.

As has been said many times: it ain't personal...just business.

[Subjectivist]

$this->bbcode_second_pass_quote('AdamB', '')$this->bbcode_second_pass_quote('misterno', '')$this->bbcode_second_pass_quote('AdamB', 'W')hen deciding to go ahead with a project, make sure it can withstand your IRR targets even if oil hits $10/bbl. While idiot companies that attempt to borrow themselves into growth occasionally succeed, those betting on sure things always do. Older companies know this. Boomer companies, not so much.

[AdamB]

$this->bbcode_second_pass_quote('Subjectivist', '[')
Actually the people who survived the 1986 crash have all retired by now, that was nearly 30 years ago.

[tita]

$this->bbcode_second_pass_quote('Subjectivist', 'M')any of the managerial level working there today were not yet born when the events of 1986 were taking place, and most of the others were children way back then.

[Heineken]

XOM has a huge chemicals business, which benefits from lower oil prices. That's one factor in the company's buoyancy.

[ROCKMAN]

Sub - Not that some don't exist but I don't personally know a single upper management that's under 55. And a lot over 60. And the next big group of geologists aren't 45 to 60 years old. I saw the stat for the Houston Geologic Society (that had more members then all the global societies COMBINED) that showed a huge age gap below the peak of my contemporaries. It represented the lack of geology majors during the 80's bust. In fact by mid 1980 Texas A&M was considering shutting down its graduate program in petroleum engineering.

We really are a dying breed. LOL. But maybe folks can now understand why so many very experienced managers that survived the 80's bust borrowed so much money to drill up the shales as fast as possible even though they knew it would eventually bust.

Simp!y because they knew this was their last chance to cash in before they retired. And once the monetized their gains and retired IT WASN'T GOING TO BE THEIR F*CKING PROBLEM. LOL.

I know it pisses so folks off when I say but the truth is the truth: we ain't you momma. It's not personal...just business. IOW we're pretty much like almost everyone else. LOL. You don't want to get f*cked over by high fossil fuel prices then don't choose a lifestyle so dependent upon ff.

[AdamB]

$this->bbcode_second_pass_quote('ROCKMAN', '
')I know it pisses so folks off when I say but the truth is the truth: we ain't you momma. It's not personal...just business. IOW we're pretty much like almost everyone else. LOL. You don't want to get f*cked over by high fossil fuel prices then don't choose a lifestyle so dependent upon ff.