On May 9, 10:41=A0am, Don Tiberone <s_knig...@[EMAIL PROTECTED]
> wrote:
> http://articles.moneycentral.msn.com/Investing/JubaksJournal/I***xonM...
>
> By Jim Jubak
>
> Are we witnessing the death of ExxonMobil (XOM, news, msgs)?
>
> Strange question to ask with oil above $120 a barrel and ExxonMobil
> re****ting $11 billion in first-quarter profits?
>
> Not if you understand that ExxonMobil's management has bet the
> company. If that bet is wrong, over the next 15 years or so, investors
> will get to watch the gradual disappearance of ExxonMobil.
>
> In one scenario, the company disappears as a public company, going
> private by 2018 after buying up all its public stock. In another, the
> company simply liquidates as it distributes its cash to shareholders
> until there's nothing left.
>
> Far-fetched? Not at all. The warning signs were pasted all over the
> company's May 1 earnings re****t.
>
> Yes, revenue for the quarter was up 34%, to $117 billion, from the
> first quarter of 2007. And, yes, net income climbed 17%, to $10.9
> billion.
>
> But production of oil and natural gas was down almost 6%.
> Why falling production?
> ExxonMobil had an explanation, of course. The company's lower
> production was a result of resource-rich countries' demands for bigger
> shares of oil and natural-gas production as prices climbed, the
> decline of older fields and the loss of production when Venezuela
> nationalized ExxonMobil operations in that country in 2007.
>
> All true. There were short-term, one-time reasons for production to
> fall in the first quarter of 2008. But don't conclude that
> ExxonMobil's problems are limited to that quarter. All the evidence
> argues that the company will re****t lower oil and natural-gas
> production for all of 2008, even though new projects are scheduled to
> come on line in the second half of the year. Looking just at oil, the
> company's production will not grow at all through 2012.
>
> How do we know? Because that's what the company told Wall Street at
> its March 2008 annual meeting with analysts. You should know as well
> that the company's projections have a history of being too optimistic.
> So there's a good chance that when ExxonMobil actually re****ts
> production for that period, investors will see not flat but falling
> oil production.
> Proven reserves declining
> The company also reduced its projections for annual production to 4.5
> million barrels of oil equivalent a day in 2012 from the 4.8 million
> barrels a day in 2011 that it projected a year ago. Just further
> evidence that ExxonMobil has a production problem.
>
> But falling production is only part of the problem, the consequence
> today of a longer-term problem that seems to worsen each year. You
> see, not only is production likely to stay flat or fall through 2012,
> but proven oil and gas reserves are declining. Proven oil and gas
> reserves fell by 3.1% at year-end 2007 from the end of 2006, according
> to Standard & Poor's.
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take your profit by relax ... as soon as possible.
and buy on dips around 11500 levels [DOW JONES ]
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