09-10-2015, 10:09 PM
It should be clear costs can be reduced . Phil and Henry had costs at $750 now that's not going to happen but does show there is fat in plant building costs .
When others can't proceed because of low LNG prices , their projects don't work the strong low cost projects can proceed taking advantage of the need of the construction companies to get work any work .
Energy prices can't stay low forever . The day of reconning is coming as the High Yield market closes for certain oil and gas companies . Further the hedges on higher prices expire , end in 2015 for most producers . Most important the amount one can borrow in the oil and gas business gets adjusted every year around November as asset values based on commodity prices get adjusted this time downward . Some will declare bankruptcy , put themselves up for sale . Production will drop because it has to drop . And in time the cycle starts again .
These Super Majors have seen this cycle of prices 7 times . They know what to do in down cycles that's why they are Super Major's.
Say what you want about Interoil but the Hession deal was cut at the right time can't replicate that deal today with multiple payments partially based on exploration success. Unheard of deal . The refinery was sold at the right time eliminating debt .
Total has been selling assets well before oil and gas prices dropped .
These are smart persons who want to make money off what Phil found . They will . The costs are so low , the asset so large it has to happen .
When others can't proceed because of low LNG prices , their projects don't work the strong low cost projects can proceed taking advantage of the need of the construction companies to get work any work .
Energy prices can't stay low forever . The day of reconning is coming as the High Yield market closes for certain oil and gas companies . Further the hedges on higher prices expire , end in 2015 for most producers . Most important the amount one can borrow in the oil and gas business gets adjusted every year around November as asset values based on commodity prices get adjusted this time downward . Some will declare bankruptcy , put themselves up for sale . Production will drop because it has to drop . And in time the cycle starts again .
These Super Majors have seen this cycle of prices 7 times . They know what to do in down cycles that's why they are Super Major's.
Say what you want about Interoil but the Hession deal was cut at the right time can't replicate that deal today with multiple payments partially based on exploration success. Unheard of deal . The refinery was sold at the right time eliminating debt .
Total has been selling assets well before oil and gas prices dropped .
These are smart persons who want to make money off what Phil found . They will . The costs are so low , the asset so large it has to happen .