Mar 28 2015, 07:44 PM
QUOTE(langstrasse @ Mar 28 2015, 07:29 PM)
What I don't understand is why even these majors are in such a rush to make major portfolio changes - basically short-term price environment changes affecting long-term plans.
Seems to me that many companies are falling victim to the need to instantly satisfy shareholders by making radical changes just so they can make some positive statements in the annual reports.
"See ? For this financial year we sold of this and this asset and fired this many thousands of well qualified people (who will go to our competitors) and have successfully managed to beautify our accounts so analysts in air conditioned offices can write good evaluations of our stock. Woo hoo !".
3 years down the road they'll be having a major hole in reserves growth. Then go on a massive shopping spree to acquire crappy blocks.
In end year financial report, what investors want to see is the beautiful bottom line figure despite the downturn and the company beat the previous analyst forecast even by a small margin. Cant blame them for that, it the investors money that start and runs the company projects, and what the company gained from that project is for the operation of the project and also the investors dividends. Like here all say we are just ikan bilis in the wealthy game Seems to me that many companies are falling victim to the need to instantly satisfy shareholders by making radical changes just so they can make some positive statements in the annual reports.
"See ? For this financial year we sold of this and this asset and fired this many thousands of well qualified people (who will go to our competitors) and have successfully managed to beautify our accounts so analysts in air conditioned offices can write good evaluations of our stock. Woo hoo !".
3 years down the road they'll be having a major hole in reserves growth. Then go on a massive shopping spree to acquire crappy blocks.
However, this year dividends payout for all oil majors are expected to pull back into capital or reduce dividend payout. Which again investors are not happy about that. So where to get fast cash to both gain capital and still maintain happy investor dividends?
Selling assets and cutting potential current losses. The idea is to sell off whatever that making marginal profit or still have not breakeven return and store the cash from sales during downturn for next capital expenditure hopefully when oil price rises up again. The company which is laughing their ass off now are companies that have the capital to buy used asset at discounted price when others are fast to offload even at ridiculous cheap price
This post has been edited by thpace: Mar 28 2015, 07:47 PM
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