RE:RE:RE:RE:RE:GEOLOGYDirksidetrack wrote: Michael Wirth CEO Chevron said a couple of weeks ago that average capex investment by oil and gas companies is down by 30% They are spending less to find new reserves to replace production.
The reason is that the institutional investors have really scaled back their investments in hydrocarbons because of public green pressure. So now we have a demand curve starting to approach the supply curve. Inventories are tight. Price goes up.
How long will it last? Until renewables can actually replace hydrocarbons as a reliable, cost efficient energy source which in my opinion is never because oil is already stored solar energy from organic sources. No need for wind turbines or solar panels to generate it nor batteries to store it.
Regarding Kawa I am not a geologist but have learned a little bit, but not much. They talk about very complex geology with lots of uncomformities (you can google to see what that means). The earth scientists figure out the very complex puzzle of where oil bearing traps may be. CGX has about the best in the business on their board and in their management. Their latest update said that the formations were coming in, as predicted, "on depth". So it looks like they have the geology right. Now we wait for a bit longer.
There is a very interesting change in strategy for oil majors.
Prior, profits were mostly used to find more oil, currently, as you correctly state, less and less of the profits are flowing to additional reserves and more going towards dividends and share buy backs.
The subsequent decrease in supply will continue to drive increases in the price of oil and more profits will flow through to the shareholder.
A nice continuing loop, until the price of oil gets too high for the economies to handle. Then demand will start to re-adjust...