Continental Resources cuts nearly $2 billion from capital expenditures budget for 2015

[TexasTowelie]

HOUSTON — Oklahoma City-based Continental Resources continues to cut its 2015 budget in response to falling oil prices.

The exploration and production company said Monday that it plans to spend $2.7 billion on capital expenditures next year.

That’s down from the $4.6 billion budget it announced last month, which itself was a cut from a from its original $5.2 billion target.

The company also dramatically reduced its planned production growth. Last month, it told investors to expect 23 percent to 29 percent production growth in 2015. It’s pared that expectation back to projected growth of 16 percent to 20 percent.

Read more: http://fuelfix.com/blog/2014/12/22/continental-resources-announces-even-deeper-2015-cuts/

[GliderGuider]

1. This is why lower gasoline prices are not a universal boon.

People lose their jobs when any aspect of the economy takes a hit. Saving $10 on a tank of gas isn't quite so attractive when it comes at the cost of working families losing their income.

Something to keep in mind during the Christmas travel season.

[FBaggins]

3. You're reading your assumptions into what is reported

They don't plan to lay anyone off... and they expect production to continue to grow even at these lower prices.

Continental CEO Harold Hamm said no job losses are expected.

“We will have no layoffs,” he said. “We certainly have plenty to do. We won’t be growing as fast, but we will still have some growth around 20 percent.”
http://newsok.com/oklahoma-city-based-continental-resources-cuts-2015-drilling-budget/article/5378387

You have to admit that this doesn't match your expectations.

You should also keep in mind that US consumers buy about 135-140 billion gallons of gasoline per year. So yeah... >$1/gal can be a big deal. And let us not forget that that's before we talk about tens of billions of gallons of diesel fuel (that flows into the price of almost all goods)... then there's the home heating oil (that will certainly add up to many hundreds or even thousands of dollars saved by many families this winter. (We could go on and on).

Bought my first sub-$2 gasoline since the crash yesterday. That was closer to a $30 savings.

[GliderGuider]

5. Talk to me at the end of March...

When what's happening now has had a chance to work its way into national economies around the world. I'm not talking about just energy company layoffs.

[FBaggins]

6. Oh no... you haven't learned that lesson yet?

Malthusian lessons 101

Rule #1 - Don't ever make predictions over such a short term. You'll get clobbered 90%+ of the time. The date of reckoning on whatever the prediction is must be far enough into the future that you won't be around to be called on it.

chance to work its way into national economies around the world.

The vast bulk of national economies are consumers of energy... not sellers. Am I supposed to get worried about the economic impact of government employees in Venezuela losing their jobs?

[GliderGuider]

7. "Rule #1 - Don't ever make predictions over such a short term."

Following that rule would obviate 99% of all human activity, wouldn't it?

My comment this time was not couched in Malthusian terms, but rather comes from the behaviour of complex adaptive systems shot through with cybernetic feedbacks. Your interpretation of the situation is strongly reductionist, and doesn't take into account the interconnections between all aspects of a global economy.

Yes, I suggest that we might be concerned about the "economic impact of government employees in Venezuela losing their jobs." Not for its direct effect on your gasoline prices, but for what it implies about sea changes already underway in our tightly coupled global economy.

[FBaggins]

8. I gave you an extra three months

Ready to talk now? Or did you mean March of 2016?

[GliderGuider]

9. I guess I'm impatient for the collapse to start biting down hard.

But I'm not terribly attached to being right about things any more. All in good time.

[FBaggins]

10. You're actually eager for things to fall apart?

You wouldn't prefer to have been wrong all along?

[GliderGuider]

11. Yep.

I think the collapse will be tremendously liberating. But apparently I'm a Martian.

[Nihil]

12. Not wishing to butt in but I'm certainly eager for things to fall apart ...

... as I want the bastards who have been making obscene profits out of
the destruction of the ecosphere to be hurt by the crash rather than just
living out their lives in unbelievable luxury and leaving the pain to later
generations.

(I also want to be around to help my kids weather the first wave of storms,
even if I don't live long enough to see the next generation.)

[FBaggins]

13. Ah... but GG's notion of "fall apart" involves billions dying

Not just the top tier of the 1%

[GliderGuider]

14. Once the dying starts it will sweep all into the circle of its scythe

Rich or poor, Death makes no distinction.

[GliderGuider]

15. Here's a great comment from The Automatic Earth

It's directed specifically at the Greek situation, but it bears on my point because it describes a major initial factor in the collapse.

An imperium feeds on its periphery, hollowing it out until the shell that remains collapses in on itself. Greece is the first, or at least the most visible, casualty of that process, but it won’t be the last. As the periphery is sucked dry, the centre will starve. The centre and the periphery are not determined geographically by lines on a map. The centre is the financial system, which has evolved from a highly effective parasite to an all-consuming monstrosity. That centre is laying claim to the underlying real wealth in a highly under collateralized world, where there is far too little underlying real wealth to satisfy more than a fraction of the outstanding promises it ostensibly backs.

Europe is currently in the forefront of financial crisis, but it is by no means the only part of the world facing catabolic collapse. The hollowing out performed by decades of ponzi dynamics has been very thorough, and the dominos are beginning to fall.

[4dsc]

2. Cry me a river

its why its called capitalism after all. I won't lose any sleep over these budget cuts or people losing their jobs. Its a never ending cycle in the oil world after all. It happened before and it will happen again/