Analysts presentation revealed a 44% Reserves Replacement Ratio for 2019. That’s a pretty alarming downturn from the +100% rates we’ve been enjoying over the last few years. The GM of Global Reserves liked to chest thump on the good news, will he own the bad? How about the GM’s of RM? Hello? Anybody home?
19 replies (most recent on top)
You think reserves replacement looks bad now, wait until NMA gets sold off.
I agree. Cleavon Little was a riot!
So maybe CVX should put some new, energetic talent in charge of this effort and pension-off the mortician from “Blazing saddles”.
Everything will be ok once the investing public fully understands our amazing plans to unleash the unlimited potential of California Cow Sh!t. Sure, Elon Musk figured out a way to land a rocket ship backwards and electric cars are “ok”, but what can he do with a pile of t–ds?
What do you expect when you spend f all on exploration? It’s probably the best decision these days but don’t be alarmed at the results as they should be temporary.
One big acquisition coming up!
Yep, boring topic. CVX could save a ton of $ and free up a lot of manpower by out-sourcing Reserves completely to 3rd Party Consultants.
Yawn!....boring thread...next!
@2aei- I ask you your same question... When was the last time you went to Davos, the Vactican, the White House, met with the CEOs of the Fortune 100 and numerous top political leaders of foreign nations to discuss terms to produce their natural resources..... yeah, ok, didn't think so either, Smart@ss.
Reserve replacement is important, I don't think anyone is refuting that fact. But all the reserves on earth don't amount to a sustainable business if you can't produce and sell the resources at a consistent and viable profit margin. MW, the BOD and our Executives are focused on cost control and operating the enterprise at a profit. The market is well supplied, the global social attitude is opposed to O&G (climate change mania), large investment banks are withdrawing from our investment class, and the popular media sentiment is souring more and more every day. We have to generate profits every quarter, year after year, and so exploration budgets will be focused on only the absolute best opportunities. Reserve replacement may drop lower in our priorities and production may drop in the future, as a result, but not very likely near term. Earnings are paramount for the foreseeable future. Its a large scale business and reserves will ebb and flow. For now, cash is king and the next few years will be very challenging. Pay down debt, build the balance sheet, operate lean and efficient are the actions matter now. In 10 years the energy industry will likely look significantly different from 2020. If you think you know more about how to run our company, the workings of the O&G business and the future prospects of the global energy industry landscape than the top 10-15 executives of our corporation, you are fooling yourself. When is the last time you went to Davos, the Vactican, the White House, met with the CEOs of the fortune 100 and numerous top political leaders of foreign nations to discuss terms to produce their natural resources..... yeah, ok, didn't think so.
Shell was 65% last year. Exxon was 19% a couple years ago. It's a lumpy metric boys and girls. stop posting about things you don't understand.
@2hqd, AMBU did have the reserves, only that CVX didn’t have the capability to make it happen. Reserves in the ground is one thing. Execution to get it out of the ground, profitably, is another. Don’t blame the GM of Global Reserves.
Didn’t the GM of Global Reserves come to CVX from Atlas with the big AMBU booking that just got written down? Love to see some Management Accountability.
It’s all about reserves, we need to stay the same or improve our reserves position. That’s exact why Chevron tried to acquire Anadarko. But that acquisition failed and we weren’t about to pay a bigger premium than Oxy to get the assets. After that acquisition setback, we wrote down other assets, including AMBU. When you’re going to have a bad year, it’s best to toss out all the dogs in the same year. Hopefully Chevron can start to improve its books in 2020.
It’s helpful to see the context for that number. The AMBU impairment drove most of the imbalance. Produced 1.1 Bboe, booked 1.0 Bboe, divested 0.1 Bboe, wrote down 0.4 Bboe in AMBU.
Not in our BU. We're right at about 100%. Maybe they need to get some better people.
Growth Mindset
At that rate Chevron may be out of proven reserves in a decade, P2 and 3 in 20 years, and resources in maybe 40 or 50 years! Sell your stock!
GM of Global Reserves reports the bad news, it is the business units that do not or cannot replace the reserves produced. 44% RRR is abysmal for sure. Chevron wil, be out of business in no time at that rate.