PeakOil is You
Has the danger of Peak Oil passed?
Re: Has the danger of Peak Oil passed?
by tita » Fri 19 Feb 2016, 06:16:45
AdamB - Budgets are not made from "guessing" the next year price. You just take the last year (or last quarter) price. It's the work of traders to guess the future price.
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tita - Coal
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Re: Has the danger of Peak Oil passed?
by ROCKMAN » Fri 19 Feb 2016, 09:37:52
Adam - "How in the world can you do your companies reserve estimates if you don't ever have to write down the price of oil you expect to get for your product....next year?” two different answers. First, public companies: you can pull up the SEC reserve reporting guidelines but eventually the pubcos will have outside auditors, using oil prices as DICTATED by the SEC, will calculate the company’s asset base. In addition to producing a lower revenue stream from a lower price a certain amount of reserves themselves will be removed from the count if they can’t be economically produced at the lower price.
And the private companies like Rockman’s: we don’t write down reserves per se because we don’t have to tell anyone about our business. Except, of course, our bankers if they provide the company with its borrowing base. And the bankers have their own auditors do that analysis so they don’t really care what the company has to say about reserves.
And then there are those rare companies like the Rockman’s that doesn’t borrow money: his owner is stinking rich! LOL. And trust me: he knows exactly what he owns, how much he has invested and what his future revenue will be BASED UPON WHAT HE ESTIMATES future prices will be. His money…his rules. One great advantage is that the Rockman’s company can change it business plan in one day. New plan as of a couple of months ago: no drilling unless absolutely necessary. Unless it’s economical using $20/bbl and recovers 100% of the investment in 18 months. Nearly impossible to find. OTOH he gave the Rockman and his cohorts $250 million to do acquisitions this year…he smells blood in the water and wants to take advantage of it. No different than any other business, like real estate or the stock market: buy low…sell high. The trick is to have the money to buy when everyone else is bloke. But not as easy as you might think: the vast majority of production in our theater of operations isn’t worth having because there isn’t much left to improve. So oddly were under as much pressure as those companies that are broke: if we can’t meet his goals we’re gone. My owner didn’t make $billions by funding failure. LOL.
And the private companies like Rockman’s: we don’t write down reserves per se because we don’t have to tell anyone about our business. Except, of course, our bankers if they provide the company with its borrowing base. And the bankers have their own auditors do that analysis so they don’t really care what the company has to say about reserves.
And then there are those rare companies like the Rockman’s that doesn’t borrow money: his owner is stinking rich! LOL. And trust me: he knows exactly what he owns, how much he has invested and what his future revenue will be BASED UPON WHAT HE ESTIMATES future prices will be. His money…his rules. One great advantage is that the Rockman’s company can change it business plan in one day. New plan as of a couple of months ago: no drilling unless absolutely necessary. Unless it’s economical using $20/bbl and recovers 100% of the investment in 18 months. Nearly impossible to find. OTOH he gave the Rockman and his cohorts $250 million to do acquisitions this year…he smells blood in the water and wants to take advantage of it. No different than any other business, like real estate or the stock market: buy low…sell high. The trick is to have the money to buy when everyone else is bloke. But not as easy as you might think: the vast majority of production in our theater of operations isn’t worth having because there isn’t much left to improve. So oddly were under as much pressure as those companies that are broke: if we can’t meet his goals we’re gone. My owner didn’t make $billions by funding failure. LOL.
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ROCKMAN - Expert
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Re: Has the danger of Peak Oil passed?
by AdamB » Fri 19 Feb 2016, 17:31:30
$this->bbcode_second_pass_quote('pstarr', 'A')dam, resource cost curve?
If you or the market are willing to pay me $1 million dollars/barrel, I promise to convert a carbon-rich source of your choice to lovely free-flowing liquid petroleum. TDP, Fischer–Tropsch, any way you choose. Everything is oil. That is the upper bounds.
Now if you or said market is $300 trillion in hock and has entered a financial tailspin without cash or a pot to piss in then there is your lower bounds. There is none.
The resource cost curve.
If you or the market are willing to pay me $1 million dollars/barrel, I promise to convert a carbon-rich source of your choice to lovely free-flowing liquid petroleum. TDP, Fischer–Tropsch, any way you choose. Everything is oil. That is the upper bounds.
Now if you or said market is $300 trillion in hock and has entered a financial tailspin without cash or a pot to piss in then there is your lower bounds. There is none.
The resource cost curve.
Yes. A resource cost curve. Do you have one, or know of any peak oiler that has ever produced one, or not? You implied that all the famous peak oil folks obviously knew of this, or had one, or that it wasn't a big deal. I would like to see a reference to one. Just one. From ANY of the names you mentioned.
Just one will do.
Plant Thu 27 Jul 2023 "Personally I think the IEA is exactly right when they predict peak oil in the 2020s, especially because it matches my own predictions."
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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AdamB - Volunteer
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Re: Has the danger of Peak Oil passed?
by AdamB » Fri 19 Feb 2016, 17:41:13
$this->bbcode_second_pass_quote('ROCKMAN', 'A')dam - "How in the world can you do your companies reserve estimates if you don't ever have to write down the price of oil you expect to get for your product....next year?” two different answers. First, public companies: you can pull up the SEC reserve reporting guidelines but eventually the pubcos will have outside auditors, using oil prices as DICTATED by the SEC, will calculate the company’s asset base. In addition to producing a lower revenue stream from a lower price a certain amount of reserves themselves will be removed from the count if they can’t be economically produced at the lower price.
So the SEC are the only folks capable, or allowed, to use forward looking statements when it comes to tomorrow's price expectations?
$this->bbcode_second_pass_quote('Rockman', '
')And the private companies like Rockman’s: we don’t write down reserves per se because we don’t have to tell anyone about our business. Except, of course, our bankers if they provide the company with its borrowing base. And the bankers have their own auditors do that analysis so they don’t really care what the company has to say about reserves.
So the value of your future revenue stream is estimated when you go to borrow against it? By the banks? Do they really have people who are good at this do you think?
$this->bbcode_second_pass_quote('Rockman', '
') So oddly were under as much pressure as those companies that are broke: if we can’t meet his goals we’re gone. My owner didn’t make $billions by funding failure. LOL.
A tough business indeed. My hat is off to you industry boys, for not only laying low the entire peak oil idea within a few years, but building up so much extra capacity and supply along the way that us regular consumers can motor around the country this summer for a song.
Plant Thu 27 Jul 2023 "Personally I think the IEA is exactly right when they predict peak oil in the 2020s, especially because it matches my own predictions."
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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AdamB - Volunteer
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