This can not be good news for us. More competition with money. More competition with know-how. More competition w/ money-making management discipline. These guys pushed us out of international and deep water. We just could not run with them. Now what do we do? If we get pushed out of shale, where do we go?
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This has to break down. Since 2015, budget has decreased from $15billion to $5 billion (66 percent reduction), oil price has decreased from $140 to $50 (64 percent reduction), dividend slashed from $1. To $0.265, asset sales, reserve write downs, decreased production and yet head count has been reduced only 20 percent to 13,300. There has to be more pain to come to re-balance. Head count could be reduced to 8,000-9,000. Am going to cut out and go play some golf. This place is dead. Nothing going on and parking lot is emptying out.
Increase shale competition, poor commercial shale performance, increase market demand based cost, softness in oil price, asset sales suggesting we may be considerably over-staffed particularly in Lower 48 and Canada. May want to squirrel away money, reduce purchases, check out other opportunities as it looks like storm clouds are on the horizon again. We are way over-staffed for a $5B budget with few commercial opportunities. Is anyone busy with meaningful work? If oil price does not bail us out, it will be ugly.
This is exactly when and where the income stream from refining would have helped. If COP had the massive billion $ income streams generated from P66 over the past four years, it would have been in great shape to compete in shale. On top of this, as a whole, COP has not proven itself at being particularly good in shale - massive losses each year in US shale assets.
Probably the unemployment line......
Reported that XOM, CVX & RDS are going to spend a combined $10B during 2017 on shale (primarily in Permian). RDS currently drilling Bongo 76-42 ( planning on 5-well pad w/ wells drilled on 20 ft centers). These big boys will show how it is to done. EOG and Pioneer, the recognized shale leaders, may even learn something new. COP will be unable to increase prime lease inventory. This is how we were locked out in international and deep water. Just could not get the prime lease acreage. Could not compete with XOM, CVX, RDS and others and had to exit. COP opportunities may be limited to current inventory. History repeats.
To compete, you must be competitive and COP is not. It could not run with the big dogs as an Integrated and now it is performing terrible as an E&P. We are a company that got way to complacent at $100 oil and now have an excuse for everything while our peers leave us in the dust.
OSBU!! We welcome all. We can promise negative returns but you will not be able to stop giving us money