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THE END OF A U.S. OIL GIANT: ExxonMobil’s Days Are Numbered
THE END OF A U.S. OIL GIANT: ExxonMobil’s Days Are Numbered
ExxonMobil, the largest oil company in the U.S. and a direct descendant of John D. Rockefeller’s Standard Oil, days are numbered. The once-great profitable oil giant is now borrowing money just to pay dividends. How long can this charade go on?
Good question. Now, some may believe that ExxonMobil was forced to borrow money to pay dividends due to the collapse in oil prices as a result of the global contagion. However, the company hasn’t been able to pay shareholder dividends from its cash from operations over the past four quarters, even with much higher oil prices.
The leading culprit as to why ExxonMobil lacks the available cash to pay dividends stems from the lousy economics of its U.S. oil and gas wells, especially the company’s shale oil portfolio. Ever since ExxonMobil ramped up its domestic shale oil production, that’s when the financial troubles at the company began to intensify.
The best way to compare ExxonMobil’s U.S. Upstream (oil and gas wells) performance, BEFORE and AFTER SHALE, is to go back to 2004. Even though the oil price fell considerably in Q1 2020, it was higher than the oil price in 2004. For example, ExxonMobil’s U.S. Upstream Sector earned $4.9 billion in 2004 with an average oil price of $41.51 compared to a $704 million loss on a $42.82 oil price:
Furthermore, look at the U.S. oil production differences between 2004 and Q1 2020. According to ExxonMobil’s 2006 Annual Report, the company’s average U.S. oil production in 2004 was 414,000 barrels per day (bd) versus 699,000 bd in Q1 2020. Even with higher oil production and similar oil price, ExxonMobil’s U.S. Upstream Earnings in Q1 2020 were dismal in comparison. Moreover, the company invested $1.9 billion in CAPEX for all of 2004 on its U.S. oil and gas wells compared to the $2.8 billion just for Q1 2020.
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“War is just a Racket”: Memorial Day Is A Hoax. “Our Soldiers Died for the Profits of the Bankers”
“War is just a Racket”: Memorial Day Is A Hoax. “Our Soldiers Died for the Profits of the Bankers”
Memorial Day commemorates soldiers killed in war. We are told that the war dead died for us and our freedom. US Marine General Smedley Butler challenged this view. He said that our soldiers died for the profits of the bankers, Wall Street, Standard Oil, and the United Fruit Company. Here is an excerpt from a speech that he gave in 1933:
War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.
I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we’ll fight. The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag.
I wouldn’t go to war again as I have done to protect some lousy investment of the bankers. There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.
There isn’t a trick in the racketeering bag that the military gang is blind to. It has its “finger men” to point out enemies, its “muscle men” to destroy enemies, its “brain men” to plan war
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