BP, COP, CVX, XOM and others

[KenBob]

(09-06-2015, 06:22 AM)rapidacid Wrote:

(09-05-2015, 06:35 PM)KenBob Wrote: Trying to revive a cut capital expenditure will cost much more than if the capital expenditures were kept stable.

Can you expand on this?

When projects are stopped then restarted there are all kinds of friction.

The biggest is the loss of people who know what they are doing. Skilled people who are laid off will not necessarily return if they have found another job. In addition, any skill that is not used will diminish over time.

Deferred equipment maintenance will be a bottleneck. The amount of equipment refurbishment will exceed the people available to perform this refurbishment. Equipment will need replacement which involves difficulties with obsolete equipment and excessive demand on suppliers.

Equipment for new equipment will also cause excessive demand on suppliers, causing delays.

Leases may have lapsed, which can result in delays for renewal or inability to renew the leases.

There are probably other problems. None of these are insolvable; however, they do add significantly to expenses.

[rapidacid]

Thank you.

[KenBob]

I worked on a water supply line for a fracking project in West Virginia for a minor production company. I think it would be inappropriate of me to say which one. This was a surprise since my firm does industrial engineering, not oil patch. The oil price collapsed about the time we completed the design, so it was put on the shelf.

I learned yesterday that all the people at the production company who worked fracking projects in West Virginia had been laid off.

[rapidacid]

Exxon Mobil (XOM +0.2%) loses the AAA credit rating from Standard & Poor's it held since the 1930s, as the ratings agency downgrades XOM to AA+ and says the company’s greatest business challenge is replacing its ongoing production.

"We believe Exxon Mobil's credit measures will be weak for our expectations for a 'AAA' rating due, in part, to low commodity prices, high reinvestment requirements, and large dividend payments," S&P says.S&P maintains a stable outlook on XOM but says the company's debt level had more than doubled in recent years, reflecting high capital spending and dividends as well as share repurchases that substantially exceeded internal cash flow.

[DividendGarden]

(04-26-2016, 11:20 AM)rapidacid Wrote: Exxon Mobil (XOM +0.2%) loses the AAA credit rating from Standard & Poor's it held since the 1930s, as the ratings agency downgrades XOM to AA+ and says the company’s greatest business challenge is replacing its ongoing production.

"We believe Exxon Mobil's credit measures will be weak for our expectations for a 'AAA' rating due, in part, to low commodity prices, high reinvestment requirements, and large dividend payments," S&P says.S&P maintains a stable outlook on XOM but says the company's debt level had more than doubled in recent years, reflecting high capital spending and dividends as well as share repurchases that substantially exceeded internal cash flow.

Didn't they rate the US as AAA and also the CDO's that almost took us down in 2007?  But BRK and XOM needed to be downgraded (BRK was only "put on review", not downgraded)?  Losing what little faith I had left in the ratings agencies.

[DividendGarden]

CVX announced their ninth consecutive dividend at $1.07 today. They'll have to raise by end of year in order to stay on CCC list.

http://seekingalpha.com/news/3176589-che...7-dividend