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Posted

I learned this morning some of the APC buyouts for managers with 15+ years at the company were 7 figures. Jesus, that’s a lot of money to go away. 
 

My friend at MRO is taking the severance package. Her department would office in Bartlesville. That’s a pretty easy decision. 

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Posted
I learned this morning some of the APC buyouts for managers with 15+ years at the company were 7 figures. Jesus, that’s a lot of money to go away. 
 
My friend at MRO is taking the severance package. Her department would office in Bartlesville. That’s a pretty easy decision. 

But how can she be sure she’s going to get the severance offer? Is it a choice? What if she doesn’t get the axe and becomes a COP employee? Can anyone offer to say they want the package?
Posted (edited)
9 hours ago, txduck87 said:


But how can she be sure she’s going to get the severance offer? Is it a choice? What if she doesn’t get the axe and becomes a COP employee? Can anyone offer to say they want the package?

Long story short, she doesn’t have a choice and COP doesn’t want her.

When it’s companies of comparable sizes like Oxy and APC, it’s usually voluntary and headcount is reduced “organically”. I heard Oxy hit their desired headcount well before the 18 month mark. I don’t know how to explain it other than tribal. APC people acted like a conquered people and many of them left. Some assimilated. There were many false rumors and fear mongering on message boards like TheLayoff.com. I think many left based on bad information.

Oxy had a small cut of legacy Oxy employees at the beginning of 2019. That was it for layoffs from the acquisition in 2018 to present day. It was explained as cost savings/redundancies, but it was just an excuse to throw out the bad apples. They laid off 3 people in my department. 2 had frequent absences. And the 3rd guy had a really shitty attitude and publicly spoke against a big department initiative. 
 

With COP and MRO, COP is much, much larger. They just want the assets and have no use for the personnel. I suspect they’ll lay off north of 90% of MRO employees. The deal makes zero sense to me. The crown jewel is MRO’s Eagle Ford acreage acquired from Ensign. MRO paid $4 billion for it in 2022. MRO sold for $22.5 billion. That’s a great ROI. 
 

The best advice I can offer the thread is to stay at the same company a long time and get very expensive so they’ll want to buy you out in a consolidation. Or get real good at raising private equity money. 

Edited by billfromlaketravis
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Posted

Look, we only had to wait two months for another guess to be wrong

https://www.energy.gov/ceser/articles/biden-harris-administration-continues-secure-good-deal-taxpayers-replenishment-7

Today, the U.S. Department of Energy’s (DOE) Office of Petroleum Reserves announced that contracts have been awarded for the acquisition of 3.0 million barrels of U.S.-produced crude oil for the Strategic Petroleum Reserve (SPR). The contracts awarded today represent a fully subscribed solicitation for November delivery following the Request for Proposal (RFP) that was announced on May 17, 2024. The 3 million barrels are being purchased for an average price of $77.69, well below the average of about $95 per barrel that SPR crude was sold for in 2022, securing a good deal for taxpayers. To date, DOE has purchased a total of 38.60 million barrels of oil for the SPR for an average price of $77.24 

Posted (edited)
15 hours ago, billfromlaketravis said:

The best advice I can offer the thread is to stay at the same company a long time and get very expensive so they’ll want to buy you out in a consolidation. 

Great strategy- assuming you can last for a long time somewhere - if you get bought out but the downside is that when prices drop (again) and the company looks to cut costs. Being expensive puts a target on your back by people like HR who have no clue what you actually do for the company but they do the math that they can cut you and keep more cheaper/younger people with you gone... Especially when you realize that you aren't one of those "cheap" guys anymore but rather one of the expensive "grey haired" ones...

Edited by Grimas
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Posted
18 hours ago, Rex Kramer said:

I could be off on when gas will increase, but I never made a prediction. What I stated were just facts. I guess you find facts funny

On 6/4/2024 at 6:44 PM, Rex Kramer said:

No. That’s absurd - wtf are you thinking?  The market is selling for nothing. If we’re anywhere near $70 in October, OPEC will extend cuts.

Speculation, not fact.

Quote

Also, data center electricity demand will be supplied by nat gas, and with LNG takeaway increasing by 67% over the next 18 months, I’m all of the sudden very and immediately bullish on natty. 

Speculation, not fact.

Fuck off, Rex, Dr. Beeper, Porterhouse.

Posted
4 hours ago, Grimas said:

Great strategy- assuming you can last for a long time somewhere - if you get bought out but the downside is that when prices drop (again) and the company looks to cut costs. Being expensive puts a target on your back by people like HR who have no clue what you actually do for the company but they do the math that they can cut you and keep more cheaper/younger people with you gone... Especially when you realize that you aren't one of those "cheap" guys anymore but rather one of the expensive "grey haired" ones...

Also, staying at one place for an extended time means you miss out on some significant salary bumps from jumping ship.

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Posted
9 minutes ago, Rex Kramer said:

Disingenuous, smarmy and probably fat and poor is no way to go through life

I’ve already posted your guesses that were wrong under different names, and you doubled down. Expecting you to go back 2-3 pages to see your own words it seems is also too much. Being this sensitive to a laugh emoji is very fragile of you.

Posted
41 minutes ago, Rex Kramer said:

OPEC extending cuts at a $70 level is speculation, but ask any pundit. That’s the first thing any of them said when this announcement came out. 

The 67% increase in export capacity is absolutely a fact. 

Nothing 18 months out is a fact. 

Posted
On 6/4/2024 at 5:44 PM, Rex Kramer said:

I’m all of the sudden very and immediately bullish on natty.

I feel like you've been pounding this message for a while and, while I'd love it to become reality, I have a hard time seeing gas recover in any meaningful way in the near/medium term. The amount of uneconomic dry gas/associated gas we've discovered as an industry is truly amazing.  Would love to eat those words, though...

Posted
54 minutes ago, Rex Kramer said:

Yeah well you’re correct. Weather and disaster permitting. There’s too much money in these projects for them not to come online. The only thing that can change my “fact” is a delay. 

Edit to add all 4 Bcfd doesn’t come online in 18 months. It’s 3 distinct facilities coming on between this fall and 18 months. 

Which facilities?

Posted
On 5/16/2024 at 11:19 AM, Storm the Field said:

Nat Gas has finally crawled out of the crapper a bit. Up to $2.50 today, which is its highest price since the last week of January. It has been sub-$2 since February 7th. Bottomed out at $1.57 on 3/26.

$3.05 this morning. 93% gain over the past 10 weeks.

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Posted
7 hours ago, Storm the Field said:

$3.05 this morning. 93% gain over the past 10 weeks.

Let’s check 9 weeks ago on our banker’s thoughts below. The only thing Rex does is hedge by giving vague, undefined length short and mid term guesses, then follows up with multi year guesses.

On 4/11/2024 at 9:12 AM, Rex Kramer said:

image.thumb.png.8bc5622b5691dabd0122eddfaff102de.png

 

On 5/20/2024 at 7:02 PM, Rex Kramer said:

Should I hedge NG right now?  6 month trade, either buying a put or collar with like a $2.25 floor. 

Well, show us.

Changing your commentary only 6 days ago to beat your chest over 5%, when it’s had a 93% gain over 10 weeks is zoo animal behavior.

Posted
4 hours ago, Rex Kramer said:

Gas may not play out like this right away between between now and end of ‘25, we will at least double from where we are now, and oil will top $100 again. Gas could triple

This is the perfect example of my timelines comment.

we’ve got an immediate hedge, followed by an 18 month qualifier, a 2x guess with a possibility of 3x, and then more addiction to $100 oil

Posted

Leaking, exploding orphan wells wreaking havoc in West Texas

"In recent years, Schuyler Wight has noticed a growing number of abandoned oil wells coming back to life, gurgling fluids on the surface of his West Texas ranch. Last week he found the biggest one yet.

Gassy water was gushing from the ground and down a quarter mile of roadway before it drained into a pasture on a remote corner of his land.

“It’s by far flowing more than any other,” Wight said. “It’s getting worse, there's no question about that.”

It’s the latest in a string of mysterious water features in the arid Permian Basin, the nation’s top producing oil field, that regulators have been unable to explain.

Last year, an eruption of salty water swamped several acres on Wight’s cousin’s ranch, triggering a multi-million-dollar cleanup. In 2022, a geyser shot up from a well in Crane County, then another on the Antina Cattle Ranch. Nearby, a large pond of gassy groundwater has become a permanent feature called Boehmer Lake.

Texas’ oilfield regulator, the Texas Railroad Commission, has yet to offer an explanation for what is driving so much water to the surface. After the massive cleanup effort in January, an agency press release said it was “continuing to investigate” the cause


https://www.texastribune.org/2024/06/11/west-texas-orphan-wells-water-bursts/?mc_cid=82ec508d3d&mc_eid=de6141672b

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Posted

I posted it when I read it. Why do you fucking care? Are you paying Rex? Are you using his “guesses” as some sort of strategy for your portfolio? If not, why do fucking care?

Posted

I don’t care, I was tagged. Rex chest thumping after he saw a 5% opening number after he missed out on 75% is weird.

I’ve got an obnoxious natural gas trader like him in my family that I’ve had to hear shit like this for at least 20 years. The guy that’s never wrong because he puts 10 guesses out there, only acts on 3 of them, and never remembers his shit picks.

Posted
23 hours ago, Horn Under a Bad Sign said:

Leaking, exploding orphan wells wreaking havoc in West Texas

"In recent years, Schuyler Wight has noticed a growing number of abandoned oil wells coming back to life, gurgling fluids on the surface of his West Texas ranch. Last week he found the biggest one yet.

Gassy water was gushing from the ground and down a quarter mile of roadway before it drained into a pasture on a remote corner of his land.

“It’s by far flowing more than any other,” Wight said. “It’s getting worse, there's no question about that.”

It’s the latest in a string of mysterious water features in the arid Permian Basin, the nation’s top producing oil field, that regulators have been unable to explain.

Last year, an eruption of salty water swamped several acres on Wight’s cousin’s ranch, triggering a multi-million-dollar cleanup. In 2022, a geyser shot up from a well in Crane County, then another on the Antina Cattle Ranch. Nearby, a large pond of gassy groundwater has become a permanent feature called Boehmer Lake.

Texas’ oilfield regulator, the Texas Railroad Commission, has yet to offer an explanation for what is driving so much water to the surface. After the massive cleanup effort in January, an agency press release said it was “continuing to investigate” the cause


https://www.texastribune.org/2024/06/11/west-texas-orphan-wells-water-bursts/?mc_cid=82ec508d3d&mc_eid=de6141672b

I’d love for the Permian majors to come together and fund an abandoned well cleanup. It’s not their problem right now, but Michael Moore is still alive. 

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Posted
9 hours ago, Rex Kramer said:

5%?  75%?  What are you talking about?  Explain it to me like I’m a child. You’re throwing numbers out there that have zero relevance to what I do for a living or as an investor. I didn’t miss out on anything. By hedging earlier at lower levels, I would’ve paid for insurance of my cash flow. I didn’t hedge and probably won’t now. I have no idea where you’re coming from man. I tagged you because you were making fun of my timing, I guess, and what I have guessed here is coming to fruition. Your entire critique is way off base. 

image.jpeg.e0ce011e99476e6fd626aeb9e8123f91.jpeg

Posted

IEA predicting Peak Oil… again. They’ve been saying the same thing since the 90s and here we are. It’s almost as if they have an agenda or something. I guess all those Indians entering the middle class are going to drive cars powered by rainbows and unicorn tears. 
 

https://www.iea.org/news/slowing-demand-growth-and-surging-supply-put-global-oil-markets-on-course-for-major-surplus-this-decade

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Posted
On 6/14/2024 at 8:40 PM, billfromlaketravis said:

IEA predicting Peak Oil… again. They’ve been saying the same thing since the 90s and here we are. It’s almost as if they have an agenda or something. I guess all those Indians entering the middle class are going to drive cars powered by rainbows and unicorn tears. 
 

https://www.iea.org/news/slowing-demand-growth-and-surging-supply-put-global-oil-markets-on-course-for-major-surplus-this-decade

Yeah, it's one thing to differ in opinion and be wrong, but IEA has no basis for their numbers. There is no conceivable way they will be anywhere near correct here given everything that is currently known and happening.

Posted

Interest spotlight on a trading episode in 2017, and example of difference between the physica/real l oil market and the financialized/"paper oil" market.

From a column this week at Bloomberg

 

Quote

Trafigura Group is a global commodity trading firm. It is essentially in the business of noticing that oil is cheap in one part of the world and expensive in another part of the world, buying the oil where it is cheap, loading it on ships, and moving it to where it is expensive. In January 2017, Trafigura noticed that oil was cheap on the US Gulf Coast and expensive in Singapore. So, between January and March, it “developed and deployed a large fuel oil export program designed to export fuel oil from the U.S. Gulf Coast to Singapore in order to profit from the open arbitrage.” That is: It made a plan to buy a lot of oil on the Gulf Coast, put it on ships, move it to Singapore and sell it there. Specifically the plan was to deliver “approximately 3.5 million barrels of physical high-sulfur fuel oil … for delivery in Singapore in February, March, and
April 2017.” [1]  

This all takes time, and there was a risk that by the time Trafigura got the ships to Louisiana, etc., the oil there would be more expensive and the arbitrage wouldn’t work. So first things first: Before moving ships, buying physical oil, etc., Trafigura bought oil futures as a hedge. [2]  “Trafigura established a long derivative position in U.S. Gulf Coast high-sulfur fuel oil, in part as an economic hedge for its anticipated purchases of physical fuel oil to export to Singapore.” You buy 3.5 million barrels of oil futures at today’s price, and then you go out and buy actual oil over time to load on your ships. [3]  If the price of oil goes up while you are buying it, you don’t care: You pay more for the oil you’re buying, but you make more money on your futures. You’re hedged.

Effectively, Trafigura saw a price signal — “oil is cheap in the Gulf and expensive in Singapore” — and responded in two ways. First financially (it bought futures to lock in the cheap Gulf price), and then physically (it went and actually moved the oil from Texas to Singapore).

But it went overboard on its hedging: It bought more than 3.5 million barrels of futures. “The long derivative position entered into by Trafigura was in excess of its short physical position that resulted from plan to purchase fuel oil in the U.S. Gulf Coast for arbitrage—the excess
essentially constituting a speculative position.” Instead of just hedging the price risk of its plan to buy 3.5 million barrels of oil in the Gulf, it made a financial bet on Gulf oil prices going up.

But it still had to buy 3.5 million barrels of actual oil in the Gulf to put on ships to send to Singapore. I said above that, because of its hedging, Trafigura should have been indifferent to the price it paid for that oil: If the price went up by $1 per barrel, it would pay $3.5 million more for the oil, but it would make $3.5 million on its futures, and those trades would offset. But of course with a long speculative position — with more than 3.5 million barrels of futures — that’s not quite true. Instead, Trafigura wanted to pay a higher price for the oil: If the price of Gulf oil went up by $1 per barrel, it would pay $3.5 million more for the oil, but it would make more than $3.5 million on its futures.

Specifically, the way the market structure worked is that the futures settled against a benchmark oil price set in the Platts window:

    The Platts U.S. Gulf Coast High Sulfur Fuel Oil benchmark (the “USGC HSFO Benchmark”) is assessed from Platts’s offices in Houston, Texas. The benchmark is assessed by Platts using a “market-on-close” (MOC) methodology. ...

    Platts generally determines the USGC HSFO Benchmark for a given day based primarily on bids to purchase, offers to sell, and trades in U.S. Gulf Coast high-sulfur fuel oil during a defined period of time called the “window” that Platts authorized. …

    The settlement value of Trafigura’s long derivative position was based on the average of the daily Platts USGC HSFO Benchmark value for the 19 trading days during the month of February 2017.

If you are an oil trader, and you have to buy a lot of physical oil, you have to make decisions about when and how you do it. Normally, you will want to buy oil as cheaply as possible. So you might do your buying quietly, without affecting the price much. You’d buy a little bit at a time, spread out over a long period. You might avoid buying too much during the Platts window, because your purchases during that window would very directly push up the benchmark price.

On the other hand, if you want the price to go up, you should just buy as sloppily as possible during the Platts window. Trafigura did:

    Beginning on February 1, 2017, and continuing through the end of the month, Trafigura bid heavily for and bought 80 cargoes (3.6 million barrels in total) of fuel oil in the Platts MOC trading window against its short physical position, an amount much larger than it had ever previously purchased in the window in a single month. Trafigura’s heavy bidding and buying activity in that short period tended to increase prices paid in the MOC window, and ultimately contributed to an increase in the daily Platts USGC HSFO Benchmark value, which benefitted Trafigura’s long derivatives position. Trafigura’s near exclusive use of the Platts window to source large quantities of fuel oil in one month departed from its past conduct, and the large volume created artificially high USGC HSFO Benchmark values throughout February 2017 that were not reflective of ordinary forces of supply and demand. This impact on the USGC HSFO Benchmark was to the detriment of market participants who looked to rely on the benchmark as a fair price reference of physical or derivatives trades.

The more it paid for its oil while Platts was setting the benchmark price, the higher that price would be, and the more money it would make on its futures position.

I have been quoting, of course, from the order in a US Commodity Futures Trading Commission enforcement action against Trafigura for market manipulation. Apparently buying all that oil at once is bad, and Trafigura agreed to pay $55 million to settle the case.

It’s a funny sort of manipulation. Trafigura was buying physical oil, in the quantities it needed, for a real economic purpose (to export it to Singapore). The buying was not itself manipulative. And it had those futures positions, in part, to hedge its price risk when it bought the oil. Given that, it made sense for Trafigura to buy during the Platts window: Its hedge was settled against the Platts window, so it should do its buying in the Platts window, to avoid any slippage between the hedge price and its actual buying price. So buying in the Platts window, to close out your Platts-based hedge, makes sense. It was just a bit too much: “The large volume created artificially high USGC HSFO Benchmark values throughout February 2017 that were not reflective of ordinary forces of supply and demand.” But you can see how a Trafigura trader could have thought “ah this is fine, we’re just buying to close out our hedge,” and then had the further thought “hmm that will push up the price, let’s put on some extra futures trades to profit from that.”

Anyway that CFTC enforcement action has two more interesting bits. Besides the market manipulation, there is an insider trading charge:

    Trafigura improperly obtained nonpublic information material to the gasoline market from [an employee of an unnamed “Mexican trading entity” (MTE)] in breach of the employer’s rules. Among other things, Trafigura received MTE’s pricing formulas used to sell its physical gasoline to another trading entity in Mexico, as well as the MTE’s monthly import “program,” meaning the volumes, types, and destination ports for gasoline the MTE planned to import in the next month. Trafigura also sometimes received competitor pricing information in the context of bilateral negotiations. The MTE considered this information confidential and material to its own business, while the information was material to Trafigura’s trading and business decisions, such as its negotiation and pricing strategies for gasoline products. Trafigura traders in Houston, Texas entered into physical and derivative gasoline transactions while knowing this confidential information.

Historically it was sort of lore that “insider trading in commodity markets is legal”: Traders in commodity markets tend to be producers or users of the commodity, and they will always have some sort of privileged information (about their own production, their discoveries, their needs, etc.) that others don’t have. But using other market participants’ inside information without their permission — getting the Mexican firm’s inside information and then trading based on that — is not allowed. “Trading commodities in interstate commerce or derivatives in knowing possession of material, nonpublic information disclosed in breach of a pre-existing duty violates” the rules, says the CFTC.

And then there is a bad nondisclosure agreement. We have talked a few times before about the US Securities and Exchange Commission’s war on NDAs. The way it works is:

    The SEC has a “whistleblower protection” rule saying that companies can’t threaten or retaliate against their employees for reporting misconduct to the SEC.
    Many firms have employees sign nondisclosure agreements that say something like “you won’t tell anyone any confidential information you get at our firm, and if you do we can sue you.”
    The SEC interprets that as a threat against whistleblowers: Theoretically, you can read it to mean “you won’t tell anyone (including the SEC) any confidential information you get at our firm (including about our crimes), and if you do we can sue you (to retaliate for your whistleblowing).”
    Therefore, those NDAs are illegal, and the SEC can extract fines from firms that have them, even if those firms would never dream of enforcing those NDAs against whistleblowers.

This is a good enough racket for the SEC that the CFTC is getting into it:

    Trafigura required its employees to sign employment agreements, and requested that former employees sign separation agreements, with broad non-disclosure provisions that prohibited the sharing of Trafigura’s confidential information with third parties. These non-disclosure provisions did not contain carve-out language expressly permitting communications with law enforcement or regulators such as the CFTC. The provisions caused confusion that resulted in an impediment to voluntary and direct communications with the CFTC about possible violations of the [Commodity Exchange Act] and CFTC regulations in violation of the CEA’s prohibitions against impeding direct communications with the CFTC.

Two CFTC commissioners put out separate statements objecting to this conclusion, saying that it “empower the Commission to line-item edit non-disclosure agreements” and “essentially wordsmiths job offer letters and other employment-related agreements with boilerplate confidentiality provisions.”

 

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Posted

This interview aired in April 2023. Respectfully, how is it relevant to current thread discussions?

I’ll tread lightly here. Most of the money on Wall Street cares about DEI, and they want to invest in companies that have DEI initiatives. If Oxy or XOM didn’t try, they’d run a real risk of getting kicked out of hedge and pension fund portfolios. 
 

United Airlines and Amazon have purchased millions of dollars of carbon credits from Oxy. The science, well it has a lot to prove, but it’s currently a real business. 

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Posted

Hadn't seen that clip even if a year old.  But when the narrator says "that's something that is hard to wrap our head around", in reference to net zero oil, that kind of sums up the PR challenge.  Anthropogenic CO2 for both permanent sequestration and enhanced oil recovery is, in theory, a very practical way for an oil company to approach this era of net zero emission goals.  Whether they be pie-in-the-sky or not is another topic IMHO.

But why many lay persons with the loudest and most ardent followers are still so negative on net zero oil, assuming it can truly be done economically, is baffling to me. It's simple mass balance. We will see how successful or not Oxy will be at it but if it works, it could unlock massive reserves in areas where current secondary recovery is just not practical because there's no CO2 source. It just needs to not be a money drain, obviously.

Maybe people don't understand that CO2 EOR projects are a thing and that we have to actually drill for and pipe the CO2 long distances. IDK...it's not a silver bullet but it's one good piece of the puzzle.

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Posted
On 6/27/2024 at 5:40 PM, billfromlaketravis said:

Most of the money on Wall Street cares about DEI, and they want to invest in companies that have DEI initiatives. If Oxy or XOM didn’t try, they’d run a real risk of getting kicked out of hedge and pension fund portfolios. 

I was assured in a CR thread that this is absolutely, unequivocally not true.  I figured having lived it, I would have an idea, but nope - not true. 

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