We are subject to various risks and uncertainties in the course of our business. The following summarizes significant risks and uncertainties that may adversely affect our business, financial condition or results of operations.
A substantial or extended decline in liquid hydrocarbon or natural gas prices, or in refining and wholesale marketing gross margins, would reduce our operating results and cash flows and could adversely impact our future rate of growth and the carrying value of our assets.
Prices for liquid hydrocarbons and natural gas and refining and wholesale marketing gross margins fluctuate widely. Our revenues, operating results and future rate of growth are highly dependent on the prices we receive for our liquid hydrocarbons and natural gas and the margins we realize on our refined products. Historically, the markets for liquid hydrocarbons, natural gas and refined products have been volatile and may continue to be volatile in the future. Many of the factors influencing prices of liquid hydrocarbons and natural gas and refining and wholesale marketing gross margins are beyond our control. These factors include:
• worldwide and domestic supplies of and demand for liquid hydrocarbons, natural gas and refined products;
• the cost of exploring for, developing and producing liquid hydrocarbons and natural gas;
• the cost of crude oil to be manufactured into refined products;
• utilization rates of refineries;
• natural gas and electricity supply costs incurred by refineries
• the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain production controls;
• political instability or armed conflict in oil and natural gas producing regions;
• changes in weather patterns and climate;
• natural disasters such as hurricanes and tornados;
• the price and availability of alternative and competing forms of energy;
• domestic and foreign governmental regulations and taxes; and
• general economic conditions worldwide.
The long-term effects of these and other factors on the prices of liquid hydrocarbons and natural gas, as well as on refining and wholesale marketing gross margins, are uncertain.
Lower liquid hydrocarbon and natural gas prices, may cause us to reduce the amount of these commodities that we produce, which may reduce our revenues, operating income and cash flows. Significant reductions in liquid hydrocarbon and natural gas prices or refining and wholesale marketing gross margins could require us to reduce our capital expenditures or impair the carrying value of our assets.
Estimates of liquid hydrocarbon, natural gas and bitumen reserves depend on many factors and assumptions, including various assumptions that are based on conditions in existence as of the dates of the estimates. Any material changes in those conditions or other factors affecting those assumptions could impair the quantity and value of our liquid hydrocarbon, natural gas and bitumen reserves.
The proved liquid hydrocarbon and natural gas reserves information included in this report has been derived from engineering estimates. Those estimates were prepared by our in-house teams of reservoir engineers and geoscience professionals and reviewed, on a selected basis, by our Corporate Reserves Group or third-party consultants we have retained. The estimates were calculated using liquid hydrocarbon and natural gas prices in effect as of December 31, 2008, as well as other conditions in existence as of that date. Any significant future price
Bis..s Thanks for the very revealing circumstances that MRO is subject to. You need to change your name to "Dick Tracy"! (BY the way you need to post this message on all the boards of all integrated oil companies.)