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Why is the US oil industry sitting on a stockpile of unused drilling license?

CaughtInThe

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It's not like they don't use some leases and make gobs of money.

So when they lie and say that it's about money it's not about money because they would make more money.

So all you guys that think that government is the problem, turn your focus to the oil companies. There are the ones balking. They didn't do it under the Trump administration and they're still not doing it under the Biden administration.

They have tons of leases. They simply don't use them.
 

BlueTex

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I can answer that question...

Oklahoma City oil and gas producer Devon Energy has been one of Wall Street’s favorite energy stocks since the pandemic, because it has reorganized its entire business model around returning cash to shareholders.

Its latest quarterly report gave investors even more cash back, with a total dividend payout of $1 a share, compared with 34 cents a year ago. On an annualized basis, that’s equivalent to a 7.4% dividend yield at current prices.

Shares of Devon (ticker: DVN) jumped 6% after the report, to new 52-week highs. The stock is up 150% from a year ago, more than triple the gain of the average oil producer.

For the fourth quarter, Devon earned $1.39 a share on $4.3 billion in revenue, beating analysts’ expectations for earnings of $1.24 per share and $3.7 billion in revenue.

Devon’s dividend policy, which has been embraced by others in the industry, is to pay out a relatively small base dividend and then add a variable dividend payment each quarter depending on its cash flow and other metrics. The company announced that it would raise its quarterly base dividend by 5 cents, to 16 cents a share, for a 1.2% dividend yield. The company will also ramp up its stock repurchases, raising its buyback authorization 60%, to $1.6 billion. The total buyback plan is expected to equate to about 5% of the company’s existing shares.

In general oil companies are now trying to figure out how to play high oil prices. In the past, they would have increased production to take advantage of high prices while they last.

But for now, Devon and others look likely to stick to their previously announced plans of increasing production slowly so as not to overshoot. Devon did remove some of its hedges so it can take advantage of the higher prices. The company says its balance sheet is stable enough to take that risk. Devon has already surpassed targets for debt reduction, so it can spend extra cash on buybacks.



 

Callen

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Oklahoma City oil and gas producer Devon Energy has been one of Wall Street’s favorite energy stocks since the pandemic, because it has reorganized its entire business model around returning cash to shareholders
Same thing is being said by Exxon

"When asked about production targets for 2022 during a January earnings call, ExxonMobil CEO Darren Woods responded, "The primary objectives we've had in looking at the portfolio is less about volume and volume targets and more about the quality and profitability of the barrels that we're producing."

........and this from a Colorado oil producer

 

CaughtInThe

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So the 1st 2 replies say that the oil industry is more concerned about dollars than producing more oil on the unused leases.

While dumbasses believe places like Fox and think that the government is holding up the oil industry.

You can't fix stupid.
 
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CaughtInThe

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I can answer that question...

Oklahoma City oil and gas producer Devon Energy has been one of Wall Street’s favorite energy stocks since the pandemic, because it has reorganized its entire business model around returning cash to shareholders.

Its latest quarterly report gave investors even more cash back, with a total dividend payout of $1 a share, compared with 34 cents a year ago. On an annualized basis, that’s equivalent to a 7.4% dividend yield at current prices.

Shares of Devon (ticker: DVN) jumped 6% after the report, to new 52-week highs. The stock is up 150% from a year ago, more than triple the gain of the average oil producer.

For the fourth quarter, Devon earned $1.39 a share on $4.3 billion in revenue, beating analysts’ expectations for earnings of $1.24 per share and $3.7 billion in revenue.

Devon’s dividend policy, which has been embraced by others in the industry, is to pay out a relatively small base dividend and then add a variable dividend payment each quarter depending on its cash flow and other metrics. The company announced that it would raise its quarterly base dividend by 5 cents, to 16 cents a share, for a 1.2% dividend yield. The company will also ramp up its stock repurchases, raising its buyback authorization 60%, to $1.6 billion. The total buyback plan is expected to equate to about 5% of the company’s existing shares.

In general oil companies are now trying to figure out how to play high oil prices. In the past, they would have increased production to take advantage of high prices while they last.

But for now, Devon and others look likely to stick to their previously announced plans of increasing production slowly so as not to overshoot. Devon did remove some of its hedges so it can take advantage of the higher prices. The company says its balance sheet is stable enough to take that risk. Devon has already surpassed targets for debt reduction, so it can spend extra cash on buybacks.



$$$$
 

CaughtInThe

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Same thing is being said by Exxon

"When asked about production targets for 2022 during a January earnings call, ExxonMobil CEO Darren Woods responded, "The primary objectives we've had in looking at the portfolio is less about volume and volume targets and more about the quality and profitability of the barrels that we're producing."

........and this from a Colorado oil producer

$$$$
 

rickc

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Well you saw what happened with the Rush to fracking. Oil flowed, price dropped, frackers went broke and they shut down their wells.

Really the Saudi's didn't like the competition and increased production and dropped the price below what it cost to produce fracking oil.

High oil prices are good for the oil business. Upping production drops the price. Not good for the oil business.

Oil prices are set in the world market. Doesn't really matter where it comes from. OPEC is really the one who controls that worldwide oil price.
 

CaughtInThe

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High oil prices are good for the oil business. Upping production drops the price. Not good for the oil business.
and there you have it.

then the dumbasses blame the Gov.
 

bongsaway

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I can answer that question...

Oklahoma City oil and gas producer Devon Energy has been one of Wall Street’s favorite energy stocks since the pandemic, because it has reorganized its entire business model around returning cash to shareholders.

Its latest quarterly report gave investors even more cash back, with a total dividend payout of $1 a share, compared with 34 cents a year ago. On an annualized basis, that’s equivalent to a 7.4% dividend yield at current prices.

Shares of Devon (ticker: DVN) jumped 6% after the report, to new 52-week highs. The stock is up 150% from a year ago, more than triple the gain of the average oil producer.

For the fourth quarter, Devon earned $1.39 a share on $4.3 billion in revenue, beating analysts’ expectations for earnings of $1.24 per share and $3.7 billion in revenue.

Devon’s dividend policy, which has been embraced by others in the industry, is to pay out a relatively small base dividend and then add a variable dividend payment each quarter depending on its cash flow and other metrics. The company announced that it would raise its quarterly base dividend by 5 cents, to 16 cents a share, for a 1.2% dividend yield. The company will also ramp up its stock repurchases, raising its buyback authorization 60%, to $1.6 billion. The total buyback plan is expected to equate to about 5% of the company’s existing shares.

In general oil companies are now trying to figure out how to play high oil prices. In the past, they would have increased production to take advantage of high prices while they last.

But for now, Devon and others look likely to stick to their previously announced plans of increasing production slowly so as not to overshoot. Devon did remove some of its hedges so it can take advantage of the higher prices. The company says its balance sheet is stable enough to take that risk. Devon has already surpassed targets for debt reduction, so it can spend extra cash on buybacks.



Capitalism, returning cash to shareholders even if it hurts the rest of the world. In other words the shareholders are much more important than anything or anyone else. It's just business, mind over matter. They don't mind and we don't matter as long as the 0.0001 percent of the population benefits.
 

humbolt

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Exactly how much oil and/or natural gas is available in these leased areas? Anybody know? At least some exploratory wells have been drilled surely, so a rough estimate should be available somewhere. That seems like the more relevant determination.
 

Callen

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Exactly how much oil and/or natural gas is available in these leased areas? Anybody know? At least some exploratory wells have been drilled surely, so a rough estimate should be available somewhere. That seems like the more relevant determination.
Why does it even matter when the oil companies are stating openly that their focus is on share holder value not expanding drilling. See post #2 and# 3
 

CaughtInThe

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Exactly how much oil and/or natural gas is available in these leased areas? Anybody know? At least some exploratory wells have been drilled surely, so a rough estimate should be available somewhere. That seems like the more relevant determination.
and if there isn't oil why in the hell would these oil companies buy the leases.
 

CaughtInThe

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Why does it even matter when the oil companies are stating openly that their focus is on share holder value not expanding drilling. See post #2 and# 3
yup
 

CaughtInThe

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Capitalism, returning cash to shareholders even if it hurts the rest of the world. In other words the shareholders are much more important than anything or anyone else. It's just business, mind over matter. They don't mind and we don't matter as long as the 0.0001 percent of the population benefits.
i'm gonna have to give Fox/Republicans credit again. they've convinced the dumbasses that Gov is standing in the way of Oil Companies drilling on land they already own (have a lease for).

that's MASTERFUL brainwashing.
 

CaughtInThe

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i just noticed a type in my OP title. it should say "leases".
 

rickc

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Exactly how much oil and/or natural gas is available in these leased areas? Anybody know? At least some exploratory wells have been drilled surely, so a rough estimate should be available somewhere. That seems like the more relevant determination.

Nope
Cost to produce vs sell price

Oil prices are very volatile. Drilling is a risky business. Just ask the frackers what happened when oil prices dropped.

US shale industry expected to shrink sharply as oil price falls​

Producers forced to shut rigs as demand slumps and US market drops below $18 a barrel

The US shale industry is expected to shrink by more than 2m barrels a day following a collapse in global oil prices which has forced oil producers to shut down their fracking rigs.
The US oil market slumped to fresh 18-year lows and below $18 a barrel on Friday following one of the biggest hikes in US oil stocks on record as demand for oil continues to fall and storage facilities near their limits. The international benchmark oil price fell to $28 a barrel.
 

Variant

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So the 1st 2 replies say that the oil industry is more concerned about dollars than producing more oil on the unused leases.

While dumbasses believe places like Fox and think that the government is holding up the oil industry.

You can't fix stupid.

Up until recently the oil industry had every right to be cautious.

They've been in a cycle where they turn on production and force oil prices down quickly to where it's economically unviable to continue several times now. This cycle has bankrupted a number of oil and oil service companies that were less cautious.
 

CaughtInThe

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Up until recently the oil industry had every right to be cautious.

They've been in a cycle where they turn on production and force oil prices down quickly to where it's economically unviable to continue several times now. This cycle has bankrupted a number of oil and oil service companies that were less cautious.
So the issue is $$$$ and not Gov.
 

Variant

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So the issue is $$$$ and not Gov.

I wouldn't disagree, the problem is that ramping up drilling is expensive and up until now the banks weren't happy to dole out loans to get a glut of production that ended in bankruptcy's and insolvency.

It's also not just a light switch you turn on.

The companies that I follow closely supply materials for fracking and up until the last few months they were running at half capacity because they couldn't run the rest of their operation at a profit. The CEO said in his conference call that to restart the plants they would need demand which is ramping up slowly and they would need workers that don't just fall out of the sky.

So, the sudden, unexpected supply decrease from Russia, would take time to fill in for even under the best conditions, reliable demand and with an interested banking sector.
 

Sand Castle

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i'm gonna have to give Fox/Republicans credit again. they've convinced the dumbasses that Gov is standing in the way of Oil Companies drilling on land they already own (have a lease for).

that's MASTERFUL brainwashing.
Or do the remove all regulation dumb asses want more regulations on oil companies
 

CaughtInThe

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I wouldn't disagree, the problem is that ramping up drilling is expensive and up until now the banks weren't happy to dole out loans to get a glut of production that ended in bankruptcy's and insolvency.

It's also not just a light switch you turn on.

The companies that I follow closely supply materials for fracking and up until the last few months they were running at half capacity because they couldn't run the rest of their operation at a profit. The CEO said in his conference call that to restart the plants they would need demand which is ramping up slowly and they would need workers that don't just fall out of the sky.

So, the sudden, unexpected supply decrease from Russia, would take time to fill in for even under the best conditions, reliable demand and with an interested banking sector.
Spinning up there 1st ever drill was expensive as well. And so was the 2nd. And so was the 3rd.
 

poweRob

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It's not like they don't use some leases and make gobs of money.

So when they lie and say that it's about money it's not about money because they would make more money.

So all you guys that think that government is the problem, turn your focus to the oil companies. There are the ones balking. They didn't do it under the Trump administration and they're still not doing it under the Biden administration.

They have tons of leases. They simply don't use them.
It's two fold and both are about $'s. Snap up the leases and sit on them no only for future drilling when prices go up and make it more profitable, but it also holds the land so your competition can't drill there.
 
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