PEAK OIL - EPOCHAL EVENT OF OUR LIVES

[HowardHughs]

Peak Oil is killing off big oil companys.:"END OF THE U.S. MAJOR OIL INDUSTRY ERA: Big Trouble At ExxonMobil"

Nov 04, 2016 - 04:39 AM GMT By: Steve_St_Angelo
http://www.marketoracle.co.uk/Article57065.html

Interesting quotes:

"This is certainly an interesting way for the leading U.S. oil company to use its surplus cash. For those who continue to be skeptics of the peak oil theory, YOU NEED TO WAKE UP AND LOOK AT THE DATA."

"Exxon’s free cash flow of $1 billion (2016 YTD) is down 95% from $24.4 billion in 2011"

"By including dividend payouts, the company was $8.3 billion in the hole in 2015"

"Exxon’s surplus cash declined significantly when the oil price was over $100 from 2011 to 2013. Even though the oil price in 2011 and 2012 was higher than it was in 2008, the company’s free cash flow including dividends was less than half. Furthermore, Exxon made no surplus cash in 2013 when the oil price was above $100."

"When the company realized towards the end of 2013 that the market would not afford to pay $120 a barrel (the cost for new oil projects), Exxon started cutting back on exploration and capital expenditures."

"Exxon Spent The Majority Its Surplus Cash To Buy Back Shares Rather Than Fund New Oil Projects"

"It seems as if Exxon realized early on that peak oil had finally arrived (privately, of course), so it decided to not waste too much money on future oil projects. Instead, the company spent a massive amount of money on stock repurchases over the past two decades… especially since 2005."

"As we can see, Exxon’s long-term debt has exploded from $6.9 billion in 2013 to $29.5 billion in the first half of 2016. Basically, the company is now borrowing money to repurchase shares or pay dividends. This is not a viable long-term business model."

"Chevron is the second largest oil company in the United States. In 2015, Chevron spent a stunning $18.2 billion more on capital expenditures and dividend payouts than the company’s operating cash. Thus, Chevron spent $10 billion more than ExxonMobil did last year ($8.3 billion after capex and dividends)."

"This paints a very gloomy picture for the sustainability of the one great U.S. major oil industry, especially when oil prices continue to decline. As was mentioned in previous articles, the Hills Group and Louis Arnoux forecast that within ten years, 75% of U.S. gas stations will be closed, and the oil industry as we know it, will have disintegrated."

"Exxon Mobil Corp. warned that it may be forced to eliminate almost 20% of its future oil and gas prospects, yielding to the sharp decline in global energy prices."

"Exxon on Friday disclosed that some 4.6 billion barrels of oil in its reserves, primarily in Canada, may be too expensive to tap."

"When Exxon reduces its oil and liquid reserves by 4.6 billion barrels, it will only have 12 years worth of reserves remaining, at current production levels. But, what if the price of oil continues to decline toward the $12 maximum price suggested in The Hills Group Report by 2020? What would that do to Exxon or other U.S. oil companies’ reserves and future oil production??
The 100+ year era of the U.S. major oil industry is coming to an end… and fast. Unfortunately, Americans have no clue just how dire the situation has become as many probably still believe in the delusion of “U.S. Energy Independence.”