CORRECTING and REPLACING SuperMajors Capital Exodus from North American Upstream Moves Into Fifth Gear; Stepped Up Divestitures & Low Plowback of Operations CashFlow.Business Editors CORRECTION...by John S. Herold, Inc. NORWALK, Conn.--(BUSINESS WIRE)--Dec. 18, 2003 In BW5305 issued Dec. 18, 2003: Headline of release should read SuperMajors Capital Exodus from North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Upstream Moves Into Fifth Gear; Stepped Up Divestitures & Low Plowback plow·back n. 1. Reinvestment of profits in the business that earned them. 2. An amount of profits thus reinvested. of Operations CashFlow (sted John S. Herold Inc. Highlights Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east Lease Sale Forecast Service) The corrected release reads: SUPERMAJORS CAPITAL EXODUS FROM NORTH AMERICAN UPSTREAM MOVES INTO FIFTH GEAR; STEPPED UP DIVESTITURES & LOW PLOWBACK OF OPERATIONS CASHFLOW It's no secret that major oil companies have been deploying capital out of the mature North American basin into higher potential overseas arena. However, a recent Herold study found that the rate of the "capital exodus" is more severe than expected. Herold estimates that the Super Majors will generate upward of more than; above. See also: Upward $30 billion from their US upstream assets, including divestiture proceeds, in 2003. Remarkably, there have been no sizeable domestic acquisitions in 2003 to balance the flight of capital out of the United States or to stimulate the Majors' upstream reinvestment rates. Total plowback of the Majors' cash flow this year comes to only 40%; addition of divestiture proceeds brings the ratio down to a mere 34%. By way of comparison, Herold estimates that the US plowback ratio Plowback Ratio A fundamental analysis ratio that measures the amount of earnings retained after dividends have been paid out. This is the opposite of the payout ratio, which measures the amount of dividends that are paid out as a percentage of earnings. of the Super Majors was 63% in 2002. "North American production volumes for the SuperGiants are certain to erode further in 2004 and beyond. The North American upstream Golden Goose will be laying ever smaller eggs," said Arthur Smith, Herold Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . In addition to the an acceleration rate of decline in conventional North American volumes, Smith expects an extension of a very tight natural gas markets in North America with thin inventories and strong wellhead well·head n. 1. The source of a well or stream. 2. A principal source; a fountainhead. 3. The structure built over a well. wellhead Noun 1. prices. At the same time, ongoing divestitures of North American assets by the SuperGiants could provide opportunities for financially able independent E&P companies. |
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