Northoil

Exxon Apostasy: A Closer Look at the Oil Giant's Real Valuation

Agree w/gearhead. XOM is an integrated company. It doesn't just make money on the crude it owns (the reserves the author makes so much of), but also on the refining and retail marketing sides. Less than half the gas it sells is made from the crude it owns. When the price of crude goes down, yes, they make less profit on their equity crude but more on their refined products. You did notice, didn't you, that prices don't move down as fast as they went up?

XOM has made a 15% return since the world began. It's a great company and everyone should own it.

Why Exxon Still Denies Peak Oil

I have operated under and negotiated many production sharing contracts. Maybe some exist, but I've never seen a contract where the company's share of production depends on the price of oil. And many production areas, like the North Sea, have simple revenue/taxation licenses. No, oil fields annually decline 4-8% naturally. Exploration, which is the real "sowing", is not replacing ever larger drawndowns of reserves.