ExxonMobil announced today that it may write down $30 billion of its US shale assets. Oh well, better late than never. Chevron did this earlier in the year. How long will that dividend hold up?
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It is unethical to delay write downs. What are the auditors and SEC doing? Oh yes, they are relying on xom for income. That explains.
It’s not a problem - it’s coming to grips with reality. The credit rating needs do go down to wake up our asleep at the wheel board to the reality we can’t pay the dividend and need to focus on finding a way to run a competive business. All these financial shenanigans are just red herring distractions from our inability to do a better job of anyone else producing O&G. This is the cause of our underperformance. Not dividend policy or absurdly stupid policies like “we don’t do write downs”
The problem is that the gearing ratio will be severely impacted by the write-down, which is going to jeopardize the credit rating.
The answer, my friend, is blowin' in the wind
The answer is blowin' in the wind
Won't be a big deal. Analysts already know which assets are overvalued, and it is just a hit on earnings, which even then will be classified as a "special" event. No cash impact.
EM is long long overdue to take some write-downs, and testing project viability under the current crude price scenario at year-end as required by SEC is another excuse to take write-downs and blame it on SEC policy, which EM has always argued as illogical.
It's actually a great time to clean up the balance sheet. EM resisted this for years because they didn't want to admit they overpaid or overinvested in something, aka a mistake which they don't make. Get it over with and let these impaired assets finally start generating some earnings.
Embarrassment indeed. I will bet any money that the wrong 15-20% people will be laid off.
The problematic psychotic children groomed as toxic assets by the company will remain.
Had XOM been up front about this months ago and followed suit like every other O&G company then it would probably be in a better position today. They would also be in a better position as far as company morale goes if they would have just performed a quick 20% cut in June/July complete with full severances and voluntary packages for everyone (including non-retirement eligible). Instead they've delayed write offs trying ignore the inevitable and they've led the workforce through a complete sh!tshow with shady PIPs and now a patchwork layoff plan that has everyone scratching their heads. The look ahead after all of this is said and done is a workforce and an investor community that is at odds with leadership of the corp. What a complete embarrassment this has been from the folks in Dallas. They really could not have botched this up any more than they have already.
Textbook #winning