[dohboi]

http://priceofoil.org/2016/10/31/exxon- ... mans-land/

Exxon “Enters No Man’s Land”

$this->bbcode_second_pass_quote('', 'S')omething significant happened on Friday that warrants more than just a few column inches in a newspaper.

With the most divisive Presidential election in US history just days away from concluding, it is easy to understand why more is not being made of the news, but just to tell you something seismic happened on Friday last week.

The world’s largest listed oil company, Exxon, announced that it was going to have to cut its reported proved reserves by just under a fifth – by 19 per cent.

It would be the biggest reserve revision in the history of the oil industry. ..

[onlooker]

Still waiting for KSA to do something similar

[Plantagenet]

$this->bbcode_second_pass_quote('onlooker', 'S')till waiting for KSA to do something similar

[Tanada]

Isn't this because the yearly average sale price for 2016 is about $20/bbl lower than it was in 2015? I believe the SEC requires reserves be recalculated annually based on average price?

[ROCKMAN]

A little perspective, please:

"With 22.2 billion barrels of proved oil and gas reserves at year-end 2004, ExxonMobil's reserve life at current production rates is approximately 14 years."

"At year-end 2015, ExxonMobil's proved reserves totaled 24.8 billion oil-equivalent barrels. ExxonMobil’s reserves life at current production rates is 16 years."

2004 - Proved reserves: 22.2 billion bbls eq. with a 14 year life
2015 - Proved reserves: 24.8 billion bbls eq. with a 16 year life

Yeah, let's cry a f*cking river for XOM. LOL.

And let's not forget that XOM, with $52 BILLION on hand, is in a great position to acquire a huge amount of proved PRODUCING reserves at a lower price then they've been able to for about a decade.


Such a joke: like a company cutting their price on widgets from $2 each to $1. Now their widget inventory is only worth half of what it was. And still making a $0.20 profit on each widget sold for $1.

[onlooker]

$this->bbcode_second_pass_quote('Tanada', 'I')sn't this because the yearly average sale price for 2016 is about $20/bbl lower than it was in 2015? I believe the SEC requires reserves be recalculated annually based on average price?

[ROCKMAN]

T - The SEC rules:

Every year, oil and gas companies are required by the Securities Exchange Commission (SEC) to report their proved oil and gas reserves. By reporting these reserves, companies give their investors a meaningful understanding of the resources the company controls that it believes it could economically produce, establishing the size of the company’s reserves.

As the calendar year comes to an end, bringing with it the annual reserves determination, companies are preparing to see their proved reserves affected by the dramatic decrease in prices from last year. The SEC price deck, against which companies compare their well economics to book their reserves, is set by an average price of the first day of every month of the year. The SEC price deck set at year-end 2014 for 2015 was $94.99 per barrel for crude oil, while companies were able to book gas reserves at $4.35 per MMBtu, even as both commodities’ prices dropped precipitously.

From 2006 to 2008, the SEC determined the price deck by taking the price from the last day of the preceding year. This methodology was changed following 2008, when the SEC began using the average price from the first day of each month to determine the price deck. The new system created buffers in downcycles, like the one seen in 2008, as well as the most recent one at the end of 2014.

The SEC price deck for 2016 will not have the benefit of a substantial buffer from $100+ per barrel oil, however. Using the average price for the first day of the month from January to September, and then extending September’s price out for the last three months of the year, EnerCom® determined a base-case for the 2016 SEC price deck at $50.46, or 47% lower than the price deck for 2015."

[StarvingLion]

The presently occuring deflationary collapse of the Pyramid of Ponzi results in anything US $ based headed for imminent bankruptcy.

Anything priced in US $ is now collapsing due to no collateral, little wonder we are seeing reserve revisions when expensive to extract oil no longer counts as reserves but reverts back to resources.

A fraudulent Facebook "economy" is what it is: FRAUD.

[onlooker]

Wow so Rock, we are looking at a year to year drop of roughly 50 percent. Does the proven or economically recoverable reserve tally closely match the fluctuations in price? Meaning can we expect to see many of these companies revise their reserve count a similar 50 percent less?

[ROCKMAN]

Looker - "Does the proven or economically recoverable reserve tally closely match the fluctuations in price?" Every US publicly traded oil company has to follow the same SEC pricing. But remember we are talking about two different numbers: the number of bbls economically recoverable at that SEC price and the $ value of those reserves at that price. That exact dynamic will vary somewhat from company to company. IOW Company A may have 70% of its previous number of bbls in ground uneconomic at the SEC price while Company B has only 30% uneconomic at that price.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('onlooker', '')$this->bbcode_second_pass_quote('Tanada', 'I')sn't this because the yearly average sale price for 2016 is about $20/bbl lower than it was in 2015? I believe the SEC requires reserves be recalculated annually based on average price?

[onlooker]

Ah the naive anti doomers. First off Reserves are going somewhere, they are being depleted duh. Second, to scale up Alternatives you need a viable well functioning Economy and Oil Industry, something quickly disappearing. This brings up the main point being why are oil prices low? Well while normally low oil prices are good not if they are steadily weakening the Oil Industry which in turn is going to weaken the General Economy. As the General Economy weakens it will weaken the Oil Industry. So both reinforcing each other in a vicious downward cycle. Because Oil is the preeminent resource that fuels Economic activity. Well that vicious cycle has already begun. But of course that goes over the head of skeptical naive deniers

[StarvingLion]

Wave goodbye to Outcast_Serfer,...he's headed to the 0.14 cent/hr widget factory powered by shale gas along with BW.

[StarvingLion]

$this->bbcode_second_pass_quote('onlooker', 'A')h the naive anti doomers. First off Reserves are going somewhere, they are being depleted duh. Second, to scale up Alternatives you need a viable well functioning Economy and Oil Industry, something quickly disappearing. This brings up the main point being why are oil prices low? Well while normally low oil prices are good not if they are steadily weakening the Oil Industry which in turn is going to weaken the General Economy. As the General Economy weakens it will weaken the Oil Industry. So both reinforcing each other in a vicious downward cycle. Because Oil is the preeminent resource that fuels Economic activity. Well that vicious cycle has already begun. But of course that goes over the head of skeptical naive deniers

[kublikhan]

$this->bbcode_second_pass_quote('onlooker', 'w')hile normally low oil prices are good not if they are steadily weakening the Oil Industry which in turn is going to weaken the General Economy. As the General Economy weakens it will weaken the Oil Industry. So both reinforcing each other in a vicious downward cycle.

[StarvingLion]

onlooker, look, peakoilbarrel.com has turned into another climate change site.

Climate Change during an Energy Transition
226 Comments

Open Thread- Petroleum Oct 28, 2016
49 Comments

Petroleum is off-topic (open thread) on a petroleum site.

All those broke Marxist retards are peddling the climate change religion to find a source of tax revenue and the already bankrupt oil/gas industry is the target. Bankrupt morons desperately trying to bankrupt an already bankrupt industry in a bankrupt empire.

Don't worry, Scamerica still has the F-35 Flop. It works great at the hobby store in kit model form.

[StarvingLion]

Oil industry exploration success went right into the gutter the moment they brought in all those phd computational marxists who have no foundational knowledge.

These shit companies are loaded with astrology gurus (oil price forecasters).

There could be a lot of oil out there and nobody would even know it.

[onlooker]

Haha Starve. All that carbon tax baloney and analytics amounts too nothing as you aptly stated, everything and everyone is broke. They just pretend to not be and are fooling the fools

[AdamB]

$this->bbcode_second_pass_quote('dohboi', 'h')ttp://priceofoil.org/2016/10/31/exxon-enters-no-mans-land/

Exxon “Enters No Man’s Land”

$this->bbcode_second_pass_quote('', 'S')omething significant happened on Friday that warrants more than just a few column inches in a newspaper.

With the most divisive Presidential election in US history just days away from concluding, it is easy to understand why more is not being made of the news, but just to tell you something seismic happened on Friday last week.

The world’s largest listed oil company, Exxon, announced that it was going to have to cut its reported proved reserves by just under a fifth – by 19 per cent.

It would be the biggest reserve revision in the history of the oil industry. ..

[AdamB]

$this->bbcode_second_pass_quote('onlooker', 'S')till waiting for KSA to do something similar