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Tuesday, February 15, 2011

Peak Oil? What Peak Oil? XOM Replaced 210% of Its Production in 2010

Link here.
XOM reported that additions to its proved reserves in 2010 totaled 3.5 billion oil-equivalent barrels, replacing 209 percent of production. Excluding the impact of asset sales, reserves additions replaced 211 percent of production.
For newbies, XOM produces three (3) percent of the world's total oil output. Yup, for all the talk about how big XOM is, it only accounts for three percent of the world's total oil output.

When ranked by oil and gas reserves, XOM is 14th in the world with less than 1% of the total.

9 comments:

  1. For "newbies": "Liquid additions totaled 905 million oil-equivalent barrels for a 102 percent replacement ratio and gas additions totaled 2.6 billion oil-equivalent barrels for a 328 percent replacement ratio"

    Since liquids include NGLs actual oil reserves probably decreased Y-O-Y. Oil is oil, NGLs are NGLS and natural gas is natural gas. Using BOEs to report your reserves is a great way fool investors. A barrel of oil will generate 20-50 dollars of profit and a BOE of natural gas $10-20.

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  2. Nice thuoght but looks like upon further review that 2.8B out of the 3.5B was by acquisition of XTO :(


    http://www.vancouversun.com/business/Exxon+Mobil+Corporation+Announces+2010+Reserves+Replacement/4285653/story.html

    "At year-end 2010, ExxonMobil's proved reserves base increased to 24.8 billion oil-equivalent barrels, including 2.8 billion oil-equivalent barrels from XTO. The proved reserves base is split between 47 percent liquids and 53 percent gas, and includes oil sands extracted by mining and equity company reserves."

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  3. You are correct.

    There was an interesting review of XOM's purchase of XTO ("natural gas") last year.

    See the link to that news story at my posting:
    http://milliondollarway.blogspot.com/2011/01/xom-earnings-4q10.html.

    XOM has a reputation for being very strategic ("very long term") in their thinking.

    Thus, for many, the patience required may not be worth it. One may require a ten-year horizon when investing in some companies.

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  4. My comment above was in reply to the first comment regarding "barrels of oil equivalent."

    The peculiarities of the "blogger" application often results in comments and replies appearing out of order.

    With regard to "peak oil," I have often opined that had "we" found an inexpensive way to use water for energy, "we" would have seen "peak oil" decades ago. "We'll" quit drilling for oil when something less expensive and acceptable to the western world comes along.

    Coal is less expensive but not "acceptable enough" for wider use in the western world. Natural gas is also less expensive but is not yet accepted as an alternative fuel by most (?) folks in the west.

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  5. If peak oil is correct then another reason to quit drilling would be
    that there us no more oil no ?

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  6. My point was/is that the xom results do not suggest that peak oil is not an issue to be concerned about as the title of the post implies. 2.8B of xom reserve additions were an accounting event. In other words some xom bean counter made an entry on a ledger and the post implies that this was a new discovery.

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  7. Point taken; no argument here.

    But let's assume that XTO was part of XOM since inception of XOM. Fifty years ago, "we" did not know about recoverable oil in the Bakken. For the global economy,there is now recoverable oil from the Bakken that we did not know about fifty years ago. Whether it "belongs" to XOM or Shell, the global economy now has oil from the Bakken that it did not have fifty years ago.

    For XOM,it's a ledger entry; for me, it tells me that there is a bit of recoverable oil in the Bakken that we did not know about once upon a time.

    I think we are talking past each other due to different perspectives.

    But to be clear, I am not concerned about peak oil in my investing lifetime, nor my children's lifetime.

    The lessons learned during the OPEC embargo back in the 70's altered my belief system completely. (As JRR Tolkien said,"We all have our myths." And my belief system/myths do not include "peak oil." I may be in a minority, but I am not alone.)

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  8. Ok, now I am confused. You referenced the 70's oil embargo. To me the "myth" exposed by that event and subsequent devlopments was that the western world could be assured of a never ending supply of cheap oil far into the future . That myth exploded never to return. And now you look at alternatives with disdain ? You are right, I dont get it.

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  9. I dont know what lessons you learned from the embargo *40* years ago!
    But, if anything, we are more dependent on a non renewable energy
    than we were back then. You are right, in the next one or two generations, we can muddle through . Unless we as a society get serious about energy, an event that makes the 70's embargo look like child's play is looming on the horizon . I realize you are set in your ways and do not look beyond the near term. For any individual, this is not necessarily bad, but for our country long term, this could be very unfortunate.

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