2 Oct 2006
Always Read the Small Print…. Especially Chevron’s.
You should always read the small print. A friend of mine recently bid on Ebay and won what he thought was a Playstation portable thing (also known as a PS2 apparently) for his son for £40. What actually arrived in the post was a piece of paper featuring a list of auctions where such a thing could be bought. Ebay is full of this particular scam. My son recently tried to convince me to buy a quad bike for £5, until I pointed out the small print; like my friend, what we would actually be buying was a piece of paper with some nonsense about quad bikes on it. When it comes to large oil corporations, a closer read of their small print can also prove illuminating.
I was reading Chevron’s recent press release about its supposed ‘huge’ find in the Gulf of Mexico, subject of a lot of recent analysis and picking to bits, and was particularly struck by the disclaimer at the end, which fails to do a great deal to inspire confidence. It really is quite an extraordinary read, and needs little comment from me. Given that this story has been flashed all around the world and been used by various commentators to hail the end of the peak oil ‘theory’, the distance that Chevron seem keen to put between themselves and their extravagant claims is telling.
>This press release of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,” “estimates” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
>Among the factors that could cause actual results to differ materially are unknown or unexpected problems in the resumption of operations affected by Hurricanes Katrina and Rita; prices for and competitive conditions affecting supply and demand for crude oil and natural gas; refining margins and marketing margins; actions of competitors; inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; potential failure to achieve expected net production from existing and future oil and gas development projects; potential disruption or interruption of the company’s net production or manufacturing facilities due to war, accidents, political events or severe weather; potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental regulations (including, particularly, regulations and litigation dealing with gasoline composition and characteristics); and potential liability resulting from pending or future litigation. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements.
Would you buy a second-hand PS2 from these people?
Joanne Poyourow
2 Oct 2:41pm
Please realize that that first paragraph you have quoted “This press release of Chevron Corporation contains forward-looking statements …” is standard boilerplate (is that term used worldwide?). Those phrases are used by Certified Public Accountants here in the States on anything that contains projected figures (budgets, estimates, forecasts, etc). I believe the wording comes from the AICPA, the organization that guides the accountants. I think you have similar in your country, but you use a different name for the professional certification.
The second paragraph is interesting in that it seems to list everything under the sun, but again, this is likely the lawyers speaking.
I was interested in this Gulf “find” sufficiently to wade through the debunking report you posted (the abreviations and oil science were a bit daunting), but I think you’re hopping on a minor detail on this one. You seem to be supposing those 2 paragraphs are reflective of the rest of the material in the press release, and I think they are not, they are standard, and you’d probably find them on every major corporate press release that included any sort of numbers in it.
Dan
2 Oct 7:18pm
If you understood basic finance you would know that EVERY publicly traded company prefaces EVERY press release with this type of statement also known as the cover-my-ass statement or the ‘I do not want to be sued statement’.
anonymous
3 Oct 12:45am
This ‘full disclosure’ actually seems to be just the opposite of the problems you note with crooked EBay merchants and opaque sales tactics. Chevron is giving fair warning that although promising, many factors could influence the outcome of this discovery. They are warning you NOT to put all your money into CVX, because this discovery may not pan out for the above reasons and other unanticipated ones. Go ahead and question the science, but the boilerplate legal-ese of the press release proves nothing shadey about Chevron’s practices.