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Do investors know 1) how much oil can be extracted at what levels of cost and 2) how much royalties and taxes will the company have to pay to the Saudi governme
by Merrill 7y ago
Do investors know 1) how much oil can be extracted at what levels of cost and 2) how much royalties and taxes will the company have to pay to the Saudi government in the future?
Current cash flow based on current costs, levels of production and royalty/tax payments are largely irrelevant.
Seems risky to me.
- BlueTemplar 7y agoIndeed - Saudi Arabia is expected to hit peak oil roughly between 2010 and 2030 - and there are suspicions that the downslope is going to be harder than the growth half, as they've reportedly been massively using water injection to increase production. So this could (have) be(en) just their way to dump the company for the maximum amount of money while the getting was still good.
- LegitShady 7y agoWhen someone gives you a 20 year range and half of it is already passed and they can't narrow it down more they're probably making it up as they go aong.
- BlueTemplar 7y agoYou realize that this is pretty much what happened with conventional peak oil ? https://www.nationalgeographic.com/news/energy/2010/11/101109-peak-oil-iea-world-energy-outlook/ https://www.nationalgeographic.com/news/energy/2010/11/10110... (Confirming in 2010 that we hit peak conventional in 2006.) It takes years to confirm this kind of data... And we don't even have access to Saudi oil data, the best we can do is something like this : https://www.sciencedirect.com/science/article/abs/pii/S0920410515001539 https://www.sciencedirect.com/science/article/abs/pii/S09204... > Results show OPEC peak oil in 2028 at a production rate of 18.85 Gb/year and ultimate reserves of 1271.24 Gb.