Anadarko has put itself in the position of highly indebted and failing business and no longer being considered by Exxon for acquisition. If oil recovers smart move, if oil stays low and goes down even more bankruptcy will be knocking on the door!
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we are already talking to bankruptcy its coming
So you have no basis for your statement that extraction costs have dropped 1/3 or more in the last 16 months?
There was a lot of room for more efficiency justifiably forced on Drilling. Lot of waste there. But not 1/3.
Asset mix is key. We are in fact right now pumping a lot more from the low cost fields and cutting back on high cost fields. So right now cost/bbl might be 40 or less but this is a temporary cash generator to cover our costs. But when we want to monetize all our assets, the average cost/bbl is higher and has to be pushing upward because we are dumping our low cost assets to accelerate cash. Question is how bad if the glut lasts longer and some big bills come due.
Clearly NOT 40.
It's not purely an asset based return assessment. Just a statement on the opposite side of the previous. Maybe both are wrong and they land somewhere in the middle. Either way, both assessment have potential to be exaggerated.
So we're selling the high extraction cost fields, the expensive offshore fields? That's not what we're reporting. We're selling the fields that someone wants now.
Apc break even point was around 60 at the end of 2014. The focus was on efficiency for the industry after that. Are you saying that APC has become less efficient since then? I think not. After asset sales, investment in hot areas, and house cleaning, it drops to 40 or below. Just fyi.
Is 60 really the break even price? It depends on the portfolio of reserves and that could change over time. I guess that the low cost fields are being "accelerated" to our competitors.
Oil is up to $42/bbl. and only need to climb to $60/bbl. for us to break even. Meanwhile we are continuing to borrow and sell assets to fund operations! Oil is not expected to reach our break even cost until late 2017 or mid 2018 and to do that has a lot of variables such as economy driving demand and decline from some OPEC and non-Opec countries. What do you think the odds are?
It's all true. Then add in the incompetent leadership across the company.... It's a ticking time bomb.
I question the failing part, but all the other might be true.