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Gold/Mining/Energy : Big Dog's Boom Boom Room
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Winfastorlose
To: Jacob Snyder who wrote (202201)8/28/2021 11:45:09 AM
From: robert b furman2 Recommendations   of 206223
 
Hi Jacob,

I agree with your general statement.

I would add some insight to that however.

As an example XOM announced reduced Capex for their Permian shale ownings. The reduced expenditure did NOT reflect less drilling activity.

More drilling was accomplished but at greatly reduced costs.

XOM has n fact slightly boosted it Permian production 21 vs 2020.

The overall Dollars and their reduced levels overstate the level of drilling that is actually being done.

I do not know how to tie it together, but there also has been a reduction of the uncompleted wells that have been drilled.

The expenditures to complete the drilled wells may be a bit of high picking the most productive investments with the fastest return, NOT SURE.

For the smaller E&P's who do ont have the scale to make Capex work as hard as it possibly can, a reduced Capex will definitely result in less production and higher crude prices.

I suspect this will make the bigger players much more profitable and continue a roll up of the smaller player in a longer term view.

Just supposing on that idea. Full disclosure I'm long CVX and XOM. I like their plastics and chemicals. Plastics for XOM had their best Q in history.

Bob
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