I agree. Technology will help drive down costs over the long run. It’s always unforeseen events that cause costs to rise such as nationalization of assets, trying to do massive LNG projects in Australia for the first time (CVX), etc. thanks for the engagement!
Very interesting all the articles and very good graphics. The articles of the oil service companies are very good, could you do a similar one for NOV INC? It is one of the most punished by the market and could go up a lot if CAPEX is reinvested.
Thank you very much for sharing so much useful information.
Thanks for the feedback. Yup I have NOV on the list. Finishing up BKR in a couple of weeks. Tough thig on NOV is getting the USS Oilwell data out of the USX/U.S. Steel Annuals. They dont break it out. But I do have Armco data going back. I have a couple E&Ps lined up but will get cooking on this one.
Nice piece! Wonder what drove the remarkably steep drop in capital intensity of upstream production from $22 in 2014 to $8/boe now. Was it the majors exiting their highest-cost production acreages?
Yes a bit of everything, exit of high cost, shales really is a blessing. Frac crews and long laterals don’t cost as much as say Sakhalin or deep water FPSOs, etc. i think that’s why I’m that chart XOM and CVX are at the bottom (larger Permian footprint) while others are higher a la Shell. BP is lowest because they just don’t want to be an oil company anymore LoL….they’ll be back. Thanks for the question!
Excellent work. Id quibble only with one thing, PPE is a junky number unless you go back and add back write-offs - which for all but XOM are huge. Annual F&D over time would be a better proxy and more “market” oriented.
Thanks CJ yes i agree. I think in this a post i used remaining asset life PPE/dda but in successive ones i stopped. I rely more on capex /dda. Drawback to that is capex is a up to date number but dda is costs from past. Nonetheless it’s still useful when looking at secular bottoms and peaks and trends. Thanks for the feedback and support. Always appreciated!
Excellent. As an old, now retired contrarian analyst, I am truly appreciative of your effort.
Yet given my now restricted life expectancy and hyper pessimistic outlook, my focus and portfolio is totally dedicated to PMs.
But I relayed your piece to younger and more knowledgeable friends.
Thank you sir. Your reputation proceeds you and I thank you for the support!
I mean, capex/BoE should go down with technology. I agree overall absolute capex should keep increasing with inflation and more oil.
I agree. Technology will help drive down costs over the long run. It’s always unforeseen events that cause costs to rise such as nationalization of assets, trying to do massive LNG projects in Australia for the first time (CVX), etc. thanks for the engagement!
On the other hand though, we are continually chasing harder-to-access reserves
Very interesting all the articles and very good graphics. The articles of the oil service companies are very good, could you do a similar one for NOV INC? It is one of the most punished by the market and could go up a lot if CAPEX is reinvested.
Thank you very much for sharing so much useful information.
Thanks for the feedback. Yup I have NOV on the list. Finishing up BKR in a couple of weeks. Tough thig on NOV is getting the USS Oilwell data out of the USX/U.S. Steel Annuals. They dont break it out. But I do have Armco data going back. I have a couple E&Ps lined up but will get cooking on this one.
Thank you very much.
Nice piece! Wonder what drove the remarkably steep drop in capital intensity of upstream production from $22 in 2014 to $8/boe now. Was it the majors exiting their highest-cost production acreages?
Yes a bit of everything, exit of high cost, shales really is a blessing. Frac crews and long laterals don’t cost as much as say Sakhalin or deep water FPSOs, etc. i think that’s why I’m that chart XOM and CVX are at the bottom (larger Permian footprint) while others are higher a la Shell. BP is lowest because they just don’t want to be an oil company anymore LoL….they’ll be back. Thanks for the question!
Excellent work. Id quibble only with one thing, PPE is a junky number unless you go back and add back write-offs - which for all but XOM are huge. Annual F&D over time would be a better proxy and more “market” oriented.
Thanks,
A happy new subscriber
Thanks CJ yes i agree. I think in this a post i used remaining asset life PPE/dda but in successive ones i stopped. I rely more on capex /dda. Drawback to that is capex is a up to date number but dda is costs from past. Nonetheless it’s still useful when looking at secular bottoms and peaks and trends. Thanks for the feedback and support. Always appreciated!
Great work. You always teach us a thing or two. Thank you.
Thank you as always. Glad you found it helpful