{"id":22132,"date":"2016-11-12T10:34:40","date_gmt":"2016-11-12T15:34:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=22132"},"modified":"2016-11-12T10:35:18","modified_gmt":"2016-11-12T15:35:18","slug":"end-of-the-u-s-major-oil-industry-era-big-trouble-at-exxonmobil","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=22132","title":{"rendered":"End of the U.S. Major Oil Industry Era: Big Trouble At ExxonMobil"},"content":{"rendered":"
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END OF THE U.S. MAJOR OIL INDUSTRY ERA: Big Trouble At ExxonMobil<\/a><\/h3>\n<\/header>\n
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The era of the mighty U.S. major oil industry is coming to an end as the country\u2019s largest petroleum company is in big trouble.\u00a0 While ExxonMobil has been the most profitable U.S. oil company in the past, it suffered its worst year on record.<\/p>\n

For example, just four years ago, ExxonMobil enjoyed a $45 billion net income profit in 2012.\u00a0 Now compare that to a total $5 billion net income gain for the first three-quarters of 2016.\u00a0 If Exxon continues to report disappointing results for the remainder of the year, its net income will have declined a stunning 85% since 2012.<\/p>\n

Actually, the situation at Exxon is much worse if we dig a little deeper.<\/p>\n

profitability is much less when we factor in capital expenditures<\/strong><\/h3>\n

To understand the real profitability of a company we have to look at its cash flow, or what is known as free cash flow.\u00a0 Free cash flow is calculated by deducting capital expenditures (CAPEX) from the company\u2019s cash from operations.\u00a0 ExxonMobil\u2019s free cash flow declined from $24.4 billion in 2011 to $1 billion for the first nine months of 2016:<\/p>\n

\"steve-1\"<\/p>\n

So, here we can see that Exxon\u2019s free cash flow of $1 billion (2016 YTD) is down 95% from $24.4 billion in 2011.\u00a0 The reason for the rapidly falling free cash flow is due to skyrocketing capital expenditures and falling oil prices.\u00a0 But, this is only part of the picture.<\/p>\n

If we include dividend payouts, Exxon\u2019s financial situation drops down another notch.\u00a0 While free cash flow does not include dividend payouts, the money Exxon pays its shareholders must come from its available cash.\u00a0 By including dividend payouts, the company was $8.3 billion in the hole in 2015:<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

END OF THE U.S. MAJOR OIL INDUSTRY ERA: Big Trouble At ExxonMobil The era of the mighty U.S. major oil industry is coming to an end as the country\u2019s largest petroleum company is in big trouble.\u00a0 While ExxonMobil has been the most profitable U.S. oil company in the past, it suffered its worst year on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[2661,1996,1035,1041,1278,6245,3329,6074,14530],"class_list":["post-22132","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-capex","tag-capital-expenditures","tag-cash","tag-exxonmobil","tag-oil-industry","tag-peak-oil-barrel","tag-profits","tag-ron-patterson","tag-steve-srocco"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22132"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22132\/revisions"}],"predecessor-version":[{"id":22134,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22132\/revisions\/22134"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}