The full cycle cost of canadian oil sands is very high vs. a very low variable cost. It's a wedge of constant production that doesn't decline. However, a poor investment even if the cash contribution right now is good. Ryan likes the cashflow but it was paid for based on a high oil price.
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Also odd that Ryan was hyping Canadian oil sands production during the analyst call. How is that production helpful with its very high break even price.
Oh and I have some beach front property to sell you in Nevada, and I highly recommend you buy Enron Stock.
might be they can't afford to pay for the lay off packages now. I think they'll try to make us all miserable enough to quit before they do another round of lay offs.
Targeted layoffs
Your glass is half full. There will definitely be layoffs when the rig count goes down.
To @FMwNRLG, apparently you did not read all the translations. Lower 48 going to 3 rigs! A real independent would only need a maximum of 3 engineers and six or nine rig supervisors for operating the drilling rigs. Then it comes to completions, limited number of completion engineers and completion supervisors and consultants can fill in any gaps on the rig operations side. So yes, there will be layoffs.
Credit Rating Agencies - think he is referring to the Spring asset redetermination. The banks want to be sure they get their money back on bonds so they are making E&P companies that borrowed too much cut back on CAPEX and now dividends.
ConocoPhillips mistakes:
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not hedging
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selling downstream
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too high a dividend (and inceasing in Q4 2015)
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focus on growth instead of value
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cutting the workforce instead of dividends (it will hurt when we want to grow again)
Anyone find it halarious each of them took turns blaming credit rating agencies? The hell is that??
Let's just say, if Ryan and management will mislead the Analyst and Wall Street, what makes you think he mislead the employees and will not lay more people off. Remember there is a short fall in revenues and there is a plan for additional reductions in development and that means COP still has too many people. Get ready for round 3 the bell is ringing. Don't drink the kool aide......
I agree the dividend cut means no workforce reduction. Time to breathe again
You can't buy friends in the fickle investment world. Cryin Ryan is about to learn this the hard way…..
The slides shown in the call are too optimistic. At $30 oil ConocoPhillips has $1.6Bn less revenue per quarter. A look at the cashflow statement shows a $0.35Bn per quarter shortfall ignoring interest and dividends. Thats a $2Bn cash shortfall per quarter.
If assets are sold they will be the ones that are worth something at $30 oil, it's a death spiral.
They sounded very defeated in the conf. call to me. Not very inspiring leadership when you need them most if you ask me. I also like how short and curt the call ended at the end there. They were ready to get the whole thing over with.
Wall Street feels very betrayed by COP and Lance. You bet there will be more layoffs!
They have to find another $700 million in opex savings from somewhere in 2016...and that's based on $45 oil plan. So yes, more layoffs! Because Ryan, Matt and Al like their jets more than you.
There will definitely be layoffs in fact some have already taken place. Ryan Lamce email said no broad workforce reductions that just means they're picking and choosing at individual dept level vs entire company.
Don't be fooled!!
It is just you. Yes the layoffs will continue. Upper management is evaluating the reaction from the investors prior to further action. Currently the price of the stock is down 10% so expect further layoffs. The analysts are not happy.