Thread regarding Noble Energy Inc. layoffs

NPV is simply the summation of the future discounted cash flow generated by the company. Stock prices these days are driven primarily by cash flow. So NPV and stock prices are linked, but short term factors such as low oil prices significantly affect the current stock price. At $40/bbl the unconventional assets are cash flow negative, while the conventional assets are still cash flow positive. It is unreasonably bearish to assume the price of oil will not get above $40/bbl any time in the future. It seems shortsighted to sell the company based on a couple of bad quarters. Why not wait for prices to recover and then sell off the poor performing assets, not the whole company. The answer to that is that DS wanted to cash out now and convinced the BOD to sell Noble.

NPV and stock price aren’t the same thing. Just because you have assets, doesn’t make you a viable business.

"IF $40 is the bottom..."

Exactly. $40 is simply the bounce height. Current prices are driven more by market optimism than fundamentals. The recession isn't over. The CEO of J P M said today there is a disconnect between the real economy and the stock market (same applies to oil). There's a real good chance we'll retest the lows.

"IF $40 is the bottom..."

Exactly. $40 is simply the bounce height. Current prices are driven more by market optimism than fundamentals. The recession isn't over. The CEO of JP Morgan Chase said today there is a disconnect between the real economy and the stock market (same applies to oil). There's a real good chance we'll retest the lows.

"IF $40 is the bottom..."

Exactly. $40 is just the bounce height. Prices are being driven more by market optimism than fundamentals. As Jamie Dimond of JP Morgan Chase said today there is a disconnect between the real economy and the stock market. Same applies to oil markets. The recession ain't over. A world of hurt is still to come.

IF $40 is the bottom (I hope so but that's a big if)...
People are still driving less and spending less money.

need to sell because DS is 63.

I not sure how you have calculated the NPV of Noble, but if you use $50/bbl versus $40/bbl, the answer is definitely higher using $50/bbl. Sounds like you have been preparing slides for the BOD meetings.

Except Noble’s stock price wasn’t going to recover if oil snuck to $50 this year. We were going to be a zombie company. Making just enough to service our debt, never enough to actually turn a profit. The VALUE of Noble was unlikely to recover. Not to mention we LOST 400 million in the last quarter.

Noble would’ve hung on with poor stock prices, until that big debt balloon hits in a few years.

The execs deserve criticism for putting Noble into such a poor position, but selling was the right move. And I assure you it was in the works before Covid.

That is what happens when you perfect the “ buy high sell low” strategy that Noble has mastered. You get to lay-off thousands of people. Then you get to “fire sale” your company.

Buy high, sell low. One of the core pillars of Noble’s management team. Other core pillar is lay off employees as frequently as possible.