| Jul 21 @ 6:53 PM |
Big Oil profits steered to investors
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Gallows_Humor
Posts: 8,063
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By JOHN PORRETTO, AP Business Writer 1 hour, 48 minutes ago http://news.yahoo.com/s/ap/20080721/ap_on_bi_ge/oil_profitsHOUSTON - As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going? The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends. It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel. The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy. The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits. The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday. Oil prices are set on the open market, not by the oil industry. But that hasn't stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax. In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects. ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration. Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company. But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price. And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply. "If you're not spending your money finding and developing new oil, then there's no new oil," said Amy Myers Jaffe, an energy expert at Rice University who's studied spending patterns of the major oil companies. Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive. State-run oil companies, like those in Saudi Arabia and Venezuela, control about 80 percent of oil reserves — and at today's prices, it's not surprising they're keeping a tight grip on what they have. Scarce equipment and hard-to-find labor also pose problems. No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s. "It becomes a management decision," said Howard Silverblatt, a senior index analyst at Standard & Poor's. "It's not like they're going to the board and saying, 'Well, I can do one or the other or the other.' The balance sheets are flush with cash." So what's Big Oil to do?
 .....  raise prices even higher???
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| Jul 21 @ 9:38 PM |
Big Oil profits steered to investors |
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Gallows_Humor
Posts: 8,063
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no comments from the peanut gallery...
ok.. try this question out.....who is selling what stocks that they are buying...up?
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| Jul 21 @ 9:41 PM |
Big Oil profits steered to investors
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burnslikethesun
Posts: 9,606
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I only play with one stock. PPD. I buy in fall and sell in winter.
falls prices in 19 to 20 spring its about 56 a share.
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| Jul 21 @ 9:52 PM |
Big Oil profits steered to investors |
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Gallows_Humor
Posts: 8,063
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http://finance.google.com/finance?client=ob&q=NYSE:PPD...
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| Jul 21 @ 10:58 PM |
Big Oil profits steered to investors
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Kenn159
Posts: 2,774
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Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.
ExxonMobil might be the most blatant oil company in terms of its explanations of its corporate strategy, but it is marching right in step with Conoco-Phillips and Chevron in terms of ‘betting’ that stock buybacks will keep prices high and investors happy. Chevron plans to buyback $15 billion over the next three years.
It is market manipulation.
By reducing the quantity of oil on the market and by reducing available oil stock for trading, this increases stock value and therefore oil commodity value.
It should be illegal.
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| Jul 21 @ 11:00 PM |
Big Oil profits steered to investors |
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lefthandedluckie
Posts: 5,081
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The Executives are doing this stock buy back! It will increase the money they will be able to steal legally. First get the stock then pass rules that give them some of the profits from the rising stock prices. Plus, the money they have made from stealing from the public. Then they will give themselves millions in stock options...compliments of the shareholders that refuse to stop them!
Thus, you have a legal bunko, fraud going on in the Big Oil world!
Now, who would have thought these people were crooked or better yet the criminals they are! This is the next set of thieves that will be going to "Club Fed" in the future!
I would like the sentencing rules changed...25 years to life for these guys! All four of these big oil guys will be going in the next few years...I am confident of that!
Tyco...Kozlowski....I believe the name is right....had a million dollar marriage in his corporate heaven at the expense of the shareholders and Tyco....now he is doing 25 years! And guess what....he still says he is innocent! 
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| Jul 22 @ 2:34 AM |
Big Oil profits steered to investors
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Say_Yes
Posts: 1,786
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It is market manipulation.
By reducing the quantity of oil on the market and by reducing available oil stock for trading, this increases stock value and therefore oil commodity value.
It should be illegal.
I am often amazed at the lack of understanding about basic economics, such as shown in the above statement. The amount of stock that is in play has no, zero, zip, nada effect on the price of oil. Oil is a commodity, that is bought, processed and sold by corporations like Exxon. To say that the price of oil is affected by the number of shares that in play, is like saying that the price of a burger is affected by the number of shares of McDonalds that are available.
The value of the stock and is based on the earnings (and the perceived future earning capacity) of the company. The earnings of the company, is not based on the value of the stock.
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| Jul 22 @ 7:14 AM |
Big Oil profits steered to investors |
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graywolf
Posts: 40,100
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great catch gallows, 
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| Jul 22 @ 10:20 AM |
Big Oil profits steered to investors
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michedkel
Posts: 4,685
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All profits from any company are steered towards the investors who put their money in the company to begin with. Oil companies are no different. Economics 101.
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| Jul 22 @ 11:06 AM |
Big Oil profits steered to investors |
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capobeachguy
Posts: 3,658
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The Executives are doing this stock buy back! It will increase the money they will be able to steal legally. First get the stock then pass rules that give them some of the profits from the rising stock prices. Plus, the money they have made from stealing from the public. Then they will give themselves millions in stock options...compliments of the shareholders that refuse to stop them!
The board of directors of a company establishes stock buy back plans, not the corporate executives. In most corporations, the CEO of the company will often (but not always) hold the position of board chairman and the other board members will be executives of other corporations, noted educators, financial experts, etc.
Stocks and stock options are often awarded to the top executives of the firm, but this is also controlled by the board of directors.
I happen to like these incentives: I want them to be rewarded for making the company more profitable which often increases the quarterly dividends and makes the stock more attractive on the market.
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| Jul 22 @ 11:11 AM |
Big Oil profits steered to investors
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lj450
Posts: 8,399
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Isnt that the basic premise of capitalism?
Dont hate the player, hate the game.
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| Jul 22 @ 7:55 PM |
Big Oil profits steered to investors |
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vinnytmd
Posts: 6,004
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It is market manipulation.
By reducing the quantity of oil on the market and by reducing available oil stock for trading, this increases stock value and therefore oil commodity value.
It should be illegal. 
Kenn, you should read the post by say yes slowly and send him and email for further explanation. He seems like a nice gent that will help you.
Your post is so far fetched and off base it is silly. You are embarrassing yourself.
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| Jul 23 @ 11:35 PM |
Big Oil profits steered to investors
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bardnsage
Posts: 419
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.....who is selling what stocks that they are buying...
,,,,that would be me,,,,
All publically traded companies, when they are cash heavy, find ways to spend the cash. They do capitol expenditures, fund major projects, invest in R & D, buy other compaines, or buy back their own stock.
It's great, that persons with a few shares of these oil company stocks, can see the value rise and sell them off for nice little profit, or wait on a dividend. It's kind of the reason you buy the stock in the first place.
As far as the manipulating of accounting charges,,,,theft, crookery, etc.... I will bet you will find their books are high and tight,,,as are any publically traded company. The enforcement and implementation of the SOX regulations have made these companies very cautious about what they put on their books, and how they spend and account for their money. With that, no CEO, CFO, or COO has the ability to give themselves raises, or give themselves stock options. That is done by the board, with some items voted on by the shareholders.
Since shareholders are greedy,,,,, (yes, I'm a share holder),,,, we like to see things that make happen that make the stock prices go up. We also like to tie as much of the compensation package for officers of the company tied to stock options. The idea is that they have the same goals and objectives that we do.
In the case Exxon,,,, it seems to be working,,,,,very well. Rather than complaining about how wrong it is for someone else to risk their money and make a dollar or two,,,, maybe we should be figuring out how to tie our compensation system for elected officials and life long govco employees into some type of perfromance goal, such as a budget surplus, and the reduction of national debt.
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| Jul 23 @ 11:51 PM |
Big Oil profits steered to investors |
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Gallows_Humor
Posts: 8,063
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maybe we should be figuring out how to tie our compensation system for elected officials and life long govco employees into some type of perfromance goal, such as a budget surplus, and the reduction of national debt.
instead....how about levying a windfall profit tax ..then taking that money and investing it into alternative energy development ...
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| Jul 24 @ 12:01 AM |
Big Oil profits steered to investors
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vinnytmd
Posts: 6,004
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Before this turns into another Bush Cheney conspiracy theory why dont you all try to understand what a stock buy back is.
From investopedia
Now let’s look at why a company would initiate such a plan.
The Motives
If you ask its management, they’ll likely tell you that a buyback is the best use of capital at a particular time. After all, the goal of a firm's management is to maximize return for shareholders, and a buyback generally increases shareholder value. The prototypical line in a buyback press release is "we don't see any better investment than in ourselves". Although this can sometimes be the case, this statement is not always true.
Nevertheless, there are still sound motives that drive companies to repurchase shares. For example, management many feel the market has discounted its share price too steeply. A stock price can be pummeled by the market for many reasons like weaker-then-expected earnings results, an accounting scandal or just a poor overall economic climate. Thus, when a company spends millions of dollars buying up its own shares, it says management believes that the market has gone too far in discounting the shares - a positive sign.
Improving Financial Ratios
Another reason a company might pursue a buyback is solely to improve its financial ratios – metrics upon which the market seems to be heavily focused. This motivation is questionable. If reducing the number of shares is not done in an attempt to create more value for shareholders but rather make financial ratios look better, there is likely to be a problem with the management. However, if a company’s motive for initiating a buyback program is sound, the improvement of its financial ratios in the process may just be a byproduct of a good corporate decision. Let’s look at how this happens.
First of all, share buybacks reduce the number of shares outstanding. Once a company purchases its shares, it often cancels them or keeps them as treasury shares, and reduces the number of shares outstanding in the process.
Moreover, buybacks reduce the assets on the balance sheet (remember cash is an asset). As a result, return on assets (ROA) actually increases because assets are reduced; return on equity (ROE) increases because there is less outstanding equity. In general, the market views higher ROA and ROE as positives. (See Reading The Balance Sheet.)
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| Jul 24 @ 12:22 AM |
Big Oil profits steered to investors |
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Kenn159
Posts: 2,774
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Maybe you shouldn’t worry so much about my embarrassment and find something to do more worthy of your time, instead of starting fights, be-littleing people and trolling.
I believe [and you don’t have to agree] that there are several causes for the high oil prices, one of which is as I already said is the quantity of Oil on the open market .
When you take profits that should be going back into production and maintaining production structures and put that money into stock trading while letting the production facilities fall into disrepair causing them to be” unexpectedly” shut down, this scenario many times over including the intentional manipulation of oil reserve stock from Opec is one of the contributing factors of higher oil prices.
If you don’t agree, then be my guest to don’t agree, just don’t “embarrass” yourself by trolling threads and throwing insults
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| Jul 24 @ 12:30 AM |
Big Oil profits steered to investors
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bardnsage
Posts: 419
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How about keeping the government's hands off my money? There was no tax when I bought the stock, and took the risk,,,, how come the government keeps rumbeling about one now? Because the government sees a pile of money they don't have. Because the public outcry that their pocket books are bare because of the cost of gas. Hey,,,,we were the ones who bought the products that created the Chinese manufacturing jugernaught, and thus thier demand for oil. We choose to ignore their politics and human rights issues, and gave them favored nation status and admited them into the WTO. We created that monster,,,, so no belly aching now about it,,,, everyone take your lumps. That's business,,,, that's how it works.
Every single person on this site, had the exact same oppertunity I had, to purchase Exxon stock. In fact, if you think Exxon is going to post record 2 quarter and 3 quarter profits, and then start buying back lots of their stock,,,,perhaps you should get in now. Ameri-Trade is easy.
As far as giving the government more of my money to fund the development of alternative energy, the government has not shown me that they can do one thing with anykind of efficency or in some cases, even competency. So giving them more money will not fix the problem of not having alternative energy.
We have alternative energy sources, but the government has pandered to special interest groups, (yes, like big oil ----- but also like environmentalist) to regulate a business environment where alternative energy sources can not compete. Ex. nuke power regs, low emission coal deposits being turned into parks (leaving the only other source in Indonesia), low sulfar emmisions on diesels - rendering the most efficent diesel engine designs of Europe useless in the US, etc.
I'm all for alternative energy, but how about a real live honest to goodness TAX CUT for PERSONS who utilize alternative energy, thereby creating a market for those products, and hence stimulating research and innovation. Create the market, and I'll invest in the supplier.
Goal of investing is to make a profit. Goal of a company is to make a profit. Goal of government is to pander and spend,,,, not to make a profit. That's like asking Jesse James to hold your wallet while you close your eyes for the playing of the Battle Hymn of the Republic.
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| Jul 24 @ 12:43 AM |
Big Oil profits steered to investors |
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lefthandedluckie
Posts: 5,081
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Basic Econ....101? CEO's....101?
Basic Econ....is what is driveled out the front door of your typical corporation! Such as...what they are really doing as compared to what they wish they had done!
I give you WorldCom! And many other of the greatest liars in corporate history....wait there are more to come...stay tuned!!
liar number one 21 months
15 years for father and 20 years for son
false accounting and as yet he is still to be sentenced
24 years the other one died before he could do his he said he could not do all that but the Judge said give me what you can
Dennis Kozlowski doing 25 years for misappropriating 400 million dollars
These guys above in the links had Boards of Directors! Yet, they stole billions! And it is going on right now! How is that republicans believe Bill Clinton caused all this?
Manipulation of stocks by buying people on the floor at the stock exchange is old hat. Having 2 sets of books is still vogue in the corporate world regardless what republicans want you to believe. Including the ones that "think" they know it all! Yes econ 101 is something I know well!
What is important in this world is not what stocks sell for or what they say they are worth....instead it is knowing whom is doing and controling the books! CEO's do that everyday! And Boards of Directors write the check and lick the bunghole of the CEO!
Next lesson...econ 102...how republicans believe that the bigger you are in the corporate world....the bigger your "Halo"! That is coming later on this Truth News Channel!
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| Jul 24 @ 2:11 AM |
Big Oil profits steered to investors
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bardnsage
Posts: 419
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Too easy.....
I give you WorldCom! And many other of the greatest liars in corporate history....wait there are more to come...stay tuned!! Busted by SOX.
liar number one 21 months Busted by SOX.
15 years for father and 20 years for son Busted by SOX.
false accounting and as yet he is still to be sentenced European Company - not covered by Sox
24 years the other one died before he could do his he said he could not do all that but the Judge said give me what you can ENRON - catalyst for SOX.
Dennis Kozlowski doing 25 years for misappropriating 400 million dollars Busted by SOX
These guys above in the links had Boards of Directors! Yet, they stole billions! Any yet they got caught.
How is that republicans believe Bill Clinton caused all this? Who said anything about Bill Clinton? Do you have a guilt complex or something? Clinton put them in, but Bush reaffirmed them as favored nation,,,so I'm disappointed you didn't blame it on Bush.
Including the ones that "think" they know it all! Yes econ 101 is something I know well! Well, you post well, but,,,,,, Econ 101 - that would be supply and demand, and basic calculations on the law of marginal substitution,,,,,yet we are talking about corporate structure and finance,,,,that would be Business 101. Your GPA started with the point,,,, didn't it. (.001)
What is important in this world is not what stocks sell for or what they say they are worth....instead it is knowing whom is doing and controling the books! CEO's do that everyday! And Boards of Directors write the check and lick the bunghole of the CEO! CFO's and CTO's not CEO's control the books. Now maybe, back in your day of working, seeing how you were born before the Koren war, that bunghole licking thing may have been important for your career,,,, but not mine.
Next lesson...econ 102...how republicans believe that the bigger you are in the corporate world....the bigger your "Halo"! That's not a halo,,,it's a target for liberals with no money of their own, and a paranoid sense of entitlement.
(three year old - "his toast has more jelly than mine")....
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| Jul 24 @ 12:47 PM |
Big Oil profits steered to investors |
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Gallows_Humor
Posts: 8,063
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How about keeping the government's hands off my money? There was no tax when I bought the stock, and took the risk,,,, how come the government keeps rumbeling about one now? Because the government sees a pile of money they don't have
it used to be legal to grow grass... but some government agency decided that it should be a crime for the good of society.. presto.. laws were passed...
it used to be legal to make your own bread at home.... and sell it to your neighbors who did not have the time to make it.. but some government agency decided that for the good of society..laws were needed to regulated the making of bread to be sold ...
how is this any different... tell your excuse to the people who due to raising gasoline prices have to decide if they are going to go broke buying gas to get to work.... or just quit working altogether and go on welfare..
interesting future dilemma for unemployment insurance..( here in California anyway.. where commuting is king..) I ( not me ..) ..was fired because I was always late for work because there were no busses running early enough.. due to the high price of fuel.. and as it takes me 2 hours to walk to work from the bus stop .. I would need a nap as soon as I got there,,, ..do I qualify for benifits?
,,,,and as there are no new jobs available within walking distance from my home.... as my car was repossessed because I was fired... do I now qualify for welfare?
meanwhile...bardnsage starts bitching about the capital gains taxes he has to pay due to his selling his stock.. as being sooo unfair.... 
ok.. try this.. how about the feds nationalizing all the oil companies as we need a reliable source of fuel ...that is not being manipulated for profit...for the good of society...
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