"In practical terms, the revision clipped Exxon’s future growth prospects until oil prices rise, costs slide or technological advances make it profitable to drill those fields."
Translation: employees are screwed, layoffs incoming.
https://finance.yahoo.com/news/exxon-reserves-plunge-32-historic-224352829.html
@ktf Reserve prices are no longer based on a single day. That should have changed 11 years ago. SEC prices are based on 12-month average price, calculated as the unweighted arithmetic average of the 1st-day-of-the-month price for each month within the 12 month period prior to the end of the reporting period, unless prices are defined by contractual agreements.
If these investments had not been made, these poor workers would never have been employed in the first place. Development of the oil sands continues to be a huge boost to the Canadian economy and countless businesses and individuals, including high paying jobs for these oil sand employees. Also excellent feedstock for US refineries, producing more jobs and GDP. If anyone suffered, it is the shareholders, which no one here care about.
Just another reminder of the extremely poor Kearl and Permian investment decisions, costing us billions of dollars with zero returns, our past/present key leadership made to pursue crude production at any and all costs. Both projects were way above the original projected CAPEX and OPEX budgets, once again proving that we have no idea what we are doing. Unfortunately good people will be terminated that operate and support these poor, high cost assets, while the Woods team of VPs and Executives get overpaid in salary and bonuses.
Regarding the single day comment... sec price is now avg of first day of the month price over for the full year. (Avg of 1/1/20, 2/1/20.....etc)
This will come back on the books end of this year. Nothing burger.
This is a direct result of ridiculous SEC rules that require all reserves classifications to be based on oil and gas prices on a single day - December 31. They will likely be added back at the end of this year. Writing down reserves because they were overstated on technical grounds is serious, but this is just typical govt bureaucracy. The market is ignoring it, as will all educated people, but of course not the haters. Have fun with it.