Occidental Petroleum ties compensation to plan to break-even at $40 a barrel

[thackney]

Occidental Petroleum ties compensation to plan to break-even at $40 a barrel
http://www.chron.com/business/energy/article/Occidental-Petroleum-ties-compensation-to-11731785.php
August 3, 2017

Occidental Petroleum Corp. has tied company-wide compensation to a plan to bring costs low enough to break even at $40 a barrel oil, CEO Vicki Hollub said Thursday.

After reshuffling its oil properties and pouring cash into the Permian Basin, the Houston oil company now has the most lucrative assets it has ever owned in its 100-year history, she said.

In its efforts to boost profit margins, the firm has added 400 drilling locations in West Texas that break even under $50 a barrel. And some of the properties it acquired in the Permian during the second quarter can pump oil for longer than the average shale well, and would boost its bottom line by $80 million in 2019 – no additional spending required.

Breaking even at $40 a barrel would mean the company would cover shareholder dividends and capital expenditures with the cash flowing from its oil and gas operations. And if crude prices hovered around $50 a barrel, the company could boost its oil production by up to 8 percent....

[IsailedawayfromFR]

After reshuffling its oil properties and pouring cash into the Permian Basin, the Houston oil company now has the most lucrative assets it has ever owned in its 100-year history, she said.

Well, there were a couple of onshore reefs in Libya in the early 70s that could be said to be superior to the present assets.

One produced a billion barrels from only 7 wells. Now that is some type of asset.

[IsailedawayfromFR]

there's also this http://www.gopbriefingroom.com/index.php/topic,275216.0.html

[thackney]

there's also this http://www.gopbriefingroom.com/index.php/topic,275216.0.html

It looks like selective reporting to me.  While the following is true:

As the productivity of older wells in shale fields is rapidly declining, explorers added rigs at a record pace this year to keep increasing output. The Permian has seen the steepest declines among the four largest U.S. shale plays.

http://www.rigzone.com/news/oil_gas/a/151297/Shale_Boom_Slows_as_Investor_Enthusiasm_for_Permian_Fades

It downplays the fact that total oil production continued climbing the most in the Permian at the same time.  And the Permian is the only shale play that didn't see a declining trend in overall production during the extended time period of lower oil prices.

Drilling Productivity Report
https://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf

[IsailedawayfromFR]

It looks like selective reporting to me.  While the following is true:

It downplays the fact that total oil production continued climbing the most in the Permian at the same time.  And the Permian is the only shale play that didn't see a declining trend in overall production during the extended time period of lower oil prices.

Drilling Productivity Report
https://www.eia.gov/petroleum/drilling/pdf/dpr-full.pdf

I think you are correct.

If you really wish to see some doom and gloom scenarios from a steadfast oil industry pessimist, here's some articles.  He has been consistently preaching against shales since he was fired by World Oil ten years ago.

While some of his rationale appears reasonable, performance from industry over the years yields divergent results to his predictions.

Guess he makes his money sowing pessimism to bankers, who gainfully employ him.

http://oilprice.com/contributors/Arthur-Berman/articles

[thackney]

I think you are correct.

If you really wish to see some doom and gloom scenarios from a steadfast oil industry pessimist, here's some articles.  He has been consistently preaching against shales since he was fired by World Oil ten years ago.

While some of his rationale appears reasonable, performance from industry over the years yields divergent results to his predictions.

Guess he makes his money sowing pessimism to bankers, who gainfully employ him.

http://oilprice.com/contributors/Arthur-Berman/articles

The web site alone tells me the articles are not worth reading.  But I am familiar with Arthur Berman writings.