[Graeme]

The Peak Oil Squeeze

It's easy to watch the big fish panic. It can even be enjoyable.

We have front-row seats to their race against Peak Oil, so we might as well sit back and let them put money in our pockets...

Because that's precisely what they're doing.

In the past week alone, more than $25 billion in major oil and gas deals was announced.

But this news shouldn't have come as a shock. We've been witness to this scramble to secure energy production for years.

And now, they're getting downright desperate.

Norwegian Desperation


The Best of the Worst

This flurry of M&A activity has been coming for awhile.

Last year, ExxonMobil (XOM) all but screamed over a bullhorn that without these acquisitions, Big Oil won't survive (I'll quote them again, in case you missed it the first time):

The corporation's reserves additions in 2010, the highest since the merger of Exxon and Mobil, reflect acquisitions, new developments, as well as revisions and extensions of existing fields resulting from drilling, studies and analysis of reservoir performance.

It's one of the only reasons the company has been able to increase reserves.

ExxonMobil's XTO acquisition accounted for 80% of the reserves added that year. Without it, the reserve-replacement ratio would have been less than half.

That deal to save their reserves cost $34.9 billion.

By the end of 2010, more than half of ExxonMobil's reserves were natural gas.

The picture would be even bleaker if we take away XOM's stake in the Canadian oil sands. Remember, these guys own 70% of Imperial Oil, which has a one-quarter share in the massive Syncrude project.

But hey — they're one of the largest publicly-traded companies in the world. What could possibly be going wrong?

Believe me, it gets worse...

energyandcapital

[seahorse3]

Graeme your last couple of threads seem to be more pessimistic than what you normally post. I like the articles but just wanting to know if your viewpoint is changing?

[Graeme]

I try to be optimistic about our future energy prospects and post accordingly. But sometimes I post articles that are not so optimistic but interest me and hopefully will interest you because they catch my attention. I see such articles at random as I glance at headlines in the media, so what I post reflects what has been published in the media. Of course they are someone else's viewpoint and may or may not describe reality in the marketplace. That's up to viewers to decide. Often I get excellent comments and/or a large number of views. Thanks. Hopefully I'm not wasting my time looking for good or heaven forbid bad news. I'm sure all of us would like to get through this energy transition relatively unscathed. . .

[seahorse3]

Graeme,

I know you try to be an optimist as do I. Like you, I try to understand the truth and try to hear all the facts, not just facts which have a bent to my personality. In the end, I want to understand the world as it is, not as I believe it to be. So, I have appreciated your optimism whether I always agree with it or not. I understand where your coming from and also understand these are articles not written by you thus may not be your opinion, so that's why I asked. For years I have always believed and still do today that all problems are solvable, I'm unconvinced they remain solvable absent a crisis. In the end, that's what makes me a pessimist, bc I believe it will take some type of crisis to make change, but that's how evolution of anything comes about, at least from what little I know of evolution.