Just like there projected financials Chevron used $70 a barrel benchmark for this ROM. We won't see $70 a barrel for at least a year.....the next ROM will be out of a cash flow problem. BCG was told to only run staffing number at $70 a barrel....guess what they are doing now????? running them at $55.....Hold on to your ass with both hands!
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If you survive this current ROM, chances are that you'll see another wave of ROM's in the spring. Unless we see $70/bbl by then. Not likely, so even those who aren't left standing - might find themselves left standing in early 2016.
It was 70 for this exercise. I was there.
bullshit. the deck is 58. has been for a long time.
The poster is correct and this Rom is a sneeze. Yesterdays WSJ. ConocoPhillips, one of the world’s largest oil-and-gas exploration companies, has already cut nearly 1,500 jobs so far this year, according to Graves. But the Houston-based company is planning more layoffs for this fall that could number into the thousands, according to people familiar with the matter. Morgan Stanley warned recently that the current downturn could be even worse than the one that crippled the industry in 1980s. If Saudi Arabia and Iraq keep running full tilt and Libya and Iran get their oil production back on track, crude prices could languish below $60 for the next three years, said Martijn Rats, an analyst. “On current trajectory, this downturn could become worse than 1986,” he said.
http://www.wsj.com/articles/sudden-drop-in-crude-oil-prices-roils-u-s-energy-firms-rebound-1437903002
it's not about being compatible???? It's about what the poster below said. THE RESONABLE PROJECTIONS ON PRICE.
Chevron has no business understanding as they are run by engineers. Except Watson who is a finance guy! Also BCG ran fully excepted crude oil future pricing mathematical functions. These models are run by every company (Except Chevron) Mainly the Time-series models which include three main categories: (1) naïve models, (2) exponential smoothing models, and (3) autoregressive models such as ARIMA1 and the ARCH 2/GARCH3. Time series is a must for Chevron because of what the other poster said....it's huge disparity of other alternate sources and heavy reliance on crude. That's the reason Chevron stated that 40% of the 3 million barrel growth would be non conventional plays on gas (They have performed LAST in the Marcellus Basin among 21 producers). EVERY RUN AT TIME-SERIES SHOWS OIL AT $50-55 a barrel. EVERY OTHER OIL COMPANY IS TAKING THIS PRICE. You will here it called the most reasonable 24 month projection. There are two other models that have much less variable inputs the Econometric Models and Quantitative models. These two models for the first time have shown above a 95% correlation at a price point. Guess what the price point is....drum beat please.....55 bucks a barrel! We all know this truly is bad bad bad bad for us lowly employees. You think Project Alpha is a layoff....my friends you have not seen anything!!!!!! CHEVRON WAS AFRAID TO MODEL $50 a barrel....THE TRUTH? THEY CAN"T HANDLE THE TRUTH....do you want to be in the share holder meeting with Watson in 4-5 months and see it play out???? This is exactly how it will paly out! Board member is Cruise and Watson Jack Nicholson....Board Member: I want answers! Watson: You want answers? Board member: I WANT THE TRUTH. Watson: YOU CAN"T HANDLE THE TRUTH Board member: Did you order Gorgon, Angola, Big Foot, Marcellus and blow half our cap when spending 100 Billion over 3 years? Watson: YOU'RE GA DAM RIGHT I DID....lol! https://www.youtube.com/watch?v=9FnO3igOkOk
Please tell me whose game plan is compatible with $40-50 oil..? lol come on man
Watson's game plan is not compatible with an extended period of $40-50 oil. I think he and his team have made significant strategic errors that are capable of bringing the company down at worst and crippling our growth in the next decade at best. Watson's vision for growth wasnt based on $100+ oil so much as it was on Saudi's continuing to act as a swing producer. Did we really bet the farm on that? We are in the proverbial perfect storm.
Nothing. They'll vest you in the present day value of it on your last day. Check BenefitsWeb for the value.
If I have 8 months to go before reaching 5 years. How much do I lose in not becoming vested in the pension if I am laid off?
2.8M Pension and 401K? How'd you pull that. New hires after 1/1/08 are on a new pension system. I'm not sure how to figure out what the lump sum values are on the old system, but for reference, someone hired in PSG 22 in 2008 who got 3% raises and aged 15% total payout on CIP with a "normal retirement age" of 2046 would have a lump sum present-day value of $1M, in 2046. Obviously bonuses may be higher or promotions may occur. Just giving an example. But $1M in 2046 isn't going to be worth much. It's probably about like retiring with $300K or so lump sum to convert to an annuity.
New formula is expressed as a Lump Sum Value is 11% times 5 highest earning years * # of years. Then it's converted to annuity if you'd like. It's also discounted 4.5% each year of age you are below 59.
I've been working since 2008 and my present-day lump sum value is just over $33k, for example. I mean, if I weren't vested yet and looking to switch jobs, I could probably get some firms to compensate me for what I'm giving up, that's how little it's worth. Shouldn't complain, I know, many companies don't even offer pensions.
$60-70 oil??? I find myself watching the CNBC financial shows during the weekdays with dismay, seeing the oil charts diving down. Get ready for extended $40's the rest of this year. Summer driving season hasn't helped drive up prices and we will soon enter the usual period when oil demand is lower. I feel for the employees who are nowhere close to retirement. I packed my bags at Chevron MidCon 2 years ago and took my $2.8M in 401k and pension. Be prepared for Project Beta, the sequel to Project Alpha, because of the protraction of lower oil prices. Good luck to all.
I find it refreshing that BCG consultants can read financial statements and understand managerial accounting. So many of Chevron's middle managers and "professionals" in PRC are clueless about budgeting and forecasting. BTW, BCG was given the assumption of $60-$70 bbl, probably from PRC.
Hahahaha. "Oh, not good if at $50.". That's funny if you say it in your head with an Indian accent. lol
Yes this was clearly stated in the kickoff meeting I had with the two Indians that I met with in June. I could not understand much of what they said but I did get $70 a barrel. Did anyone else meet with those clowns. They used buzz words, efficiency, cost reduction, complexity, redundancy. I found it funny and really sad. I got their cards their names were Aas Nodi and Nabanipa Blemnidashwana. They loved to repeat $70 for what ever reason. Of course I asked if oil is at $50. "Oh, not good if at $50." lol
Yes this is true and in fact $70 a barrel was a variable/assumption for the numbers. It was said by both BCG and Chevron management. Also $1 change in the Brent price, means $325 million to $350 million dollars loss per quarter (CASH FLOW). It also means at $120 a barrel these idiots loo0ked like super stars. It was asked what if oil is not at $70 a barrel? THEN MORE CUTS BEOFORE 12 MONTHS!!! I thought this was common knowledge? Yes or No? It was clearly stated in the meeting I attended in California???? P.S. Chevron is much more leverage in crude than Conoco Phillips or Exxon. As much as 25% more. This is killing Chevron with all the money outlays for the projects that are not coming on line. Chevron has spent 88 billion in less than 3 years on projects that are failures.
I can confirm the Alpha ROM was based on $60-70 bbl oil. Not good news if we're going to see this lull last well into next year. Well shit, I guess it could last into the next decade.... But don't tell the Chevron executives. "$100 oil here to stay." -Watson