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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: tom pope who wrote (136078)6/24/2010 11:02:15 AM
From: CommanderCricket1 Recommendation  Read Replies (3) | Respond to of 206326
 
The problem many have when looking at cost of production is much of the assets the major E&P's hold are legacy assets purchased decades ago.

In my opinion, you have to look at are the costs for developing new acreage. In the oil sands, its somewhere between $50 - $70 bbl. Deep water is a little cheaper but that is changing fast.

With those costs projected along with a reasonable return on investment will require $100 plus crude to attract capital.




To: tom pope who wrote (136078)6/24/2010 11:19:59 AM
From: Keith Feral  Read Replies (1) | Respond to of 206326
 
BP said their marginal cost of production was $60 last quarter in one of the investor responses to the oil spill. With or without the oil spill, $75 oil this quarter cuts into their profit margin from Q1 when oil prices were averaging $85, which seems like a pretty generous return over 40%. At $75, they are still making a gross profit of 25% which is nothing to sneeze at. I still wonder how we ever got to $150 a barrel back in 2008.


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