Exxon, and the Implications of 8%

peakoil.com (thread 1, thread 2) -> theoildrum.com :

Most of us thinking about peak oil have been aware for some time that the central uncertainty is the decline rate on fields in production (FIP). This dramatically affects when one believes peak will be. It's also critically important in assessing the economic impact, since the faster total production declines, the harder it will be for the economy to adjust, and as we go further and further past peak, the fewer new projects there will be to add to the declining bulk of production.

In the past, peak oil projections have used fairly low decline rates for FIP - 3%-6%. There are now several pieces of evidence that the FIP decline rate might be more like 8%. Adding that to Chris Skrebowski's list of new projects makes for a very rough ride ...

... the bulk of Exxon's failure to grow their supply as they hoped does not come from project delays, but rather than from somewhat underestimating the decline rate in their existing fields. Indeed, for the last eight years, all of the very considerable new capacity that Exxon has bought on at great expense and enormous trouble has only gone to offset declines. They have not managed to grow their production or market share one iota.

GM's perfect storm

peakoil.com -> cnn.com :

For General Motors, the hits keep coming. Unfortunately for the troubled automaker, they're not the kind of hits that bring buyers into showrooms or keep cars rolling out of them. Instead, the world's biggest automaker is getting hit by bad news - seemingly from all directions. The problems include gasoline prices, issues at its former parts unit, Delphi, accounting questions, health care and pension costs. Together it all adds up to a perfect storm for the automaker, battering its financial results, its debt rating and stock, which hit an 18-year low Wednesday.

GM has lost a stunning $2.2 billion in the first three quarters of this year, excluding special items. Company executives, including embattled CEO Rick Wagoner, won't say when they expect the automaker to return to profitability.

Investors have taken note. The stock has tumbled some 40 percent since July. The three-month drop in GM stock has shrunk its market worth to about $12 billion, far less than the $19 billion in cash on its balance sheet. And its 9 percent dividend yield may seem tempting but is also a sign investors believe GM won't be able to keep paying $2 a year to shareholders much longer.

Google Base :
american auto-makers

(2005-11-18 13:32:23 SGT) [Biz] Permalink

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