Unfortunately there are two issues with this approach:- 1. The...

Unfortunately there are two issues with this approach:-

1. The ability to affect the operational costs is limited now that the plant is about to be commissioned. Origin and Conoco Phillips are firing people left right and centre and delaying expenditure. I doubt they have the resources left to maintain the plant properly let alone drive down the operating costs. I think shale oil is a much less mature industry so there was more scope for costs downs, but even the shale oil projects are now being delayed.

2. Although the life of the project is 20 years, because of the discounting effect of inflation, money earned later in the project is worth much less in today's terms and therefore has much less impact on current project value. 5 years of oil prices around current levels will make life tough.

I still think Origin is in better shape that Santos, but I have no idea where the bottom is. They both have the advantage of being (or about to be) in production so our best hope is the delay in new projects being started might help.