Hi John,
Not saying where the bottom is , but XOM's 4 hour 2020 investor day presentation is incredible detail on how they plan to efficiently use capital to slowly harvest maximum production of Permian into 2040 and beyond.
Cube fracing is very informative - they've been doing it for almost 2 years and have improved well production since 2017. The delineating of existing but undrilled Permian Delaware section include, Gas pipelines, crude pipelines,recycled water pipelines and fiberoptic cable for digitization. They drill with seven rigs in a line and go to different depths through rock that traps the oil. The seismic knowledge of the reservoir and how to simultaneously drill and frac so that parent child loss of well in minimized is more than impressive.Each row of the rigs is spaced 10 miles aoart and the frac lines are 10,000 feet long going in all directions. Depending on the rock encountered they frac differently and show what they've learned in the lab about fracing. Modularized and smaller tank storage, gas compression plants are made outside of Texas where labor is cheaper are then shipped after drilling is done and very little is flared off as the delineation is completed before fracing starts.
The efforts to efficiently drill and find oil,transport the oil, refine the oil are impressive,and export the upgraded products to the world are what the future cashflow estimates are all about. NOT more of a commodity called crude oil.
More importantly they are upgrading steam crackers and colocated plastic plants using catalysts and proprietary technology to produce higher value products and reduce lower value products.
Steam crackers are located on Gulf of Mexico for easy export to the world.Beaumont, Baytown,and Corpus
Net result they will import less crude and export more refined products.
Lower crude prices will hurt cash flow of course.
They are not drilling more oil, they actually have fewer rigs than 2019 - but use them better to gain a more productive well. Drilling in Marcellus is shut down. They sold Norway operations one year early, yet expect to have same level of production Permian (more efficiently) plus deep water Guyana now producing - both profitable at low crude prices - especially when refined and added value upgrades.
This is link - takes 4 hours but great DETAIL on "cube fracing".
Drilling guy is excellent.
Refining and Chemical guy is awesome!
Upgrades going to pipelines and refinery upgrades to refine higher grade oils and plastics.
Selling of existing assets
XOM is/will be a great long term buy and hold stock for a dividend growth portfolio.
I'll add more shares no doubt.
We're seeing a perfect storm, and a great value buy for lord knows how many reasons.
Here's the link: globalmeet.webcasts.com
Hope you enjoy it.
Bob
Highly recommend listening before you buy any shares.
Hope you catch the bottom or at least a 6% yield plus.
This is bluechipper that will turnaround and appreciate in a long term buy and hold position.IMO
Last but not least, selling off other low margin assets and high yielding new advantaged assets is a solid and excellent management concept IMO. It has worked for Kinder Morgan! |
