You may recall from a previous post that Wonks Anonymous is skeptical of claims that we will drill our way out of this particular energy crisis.

Wonks Anonymous noted there that at least one major oil company was giving most of its profits back to its shareholders. Wonks Anonymous observed that companies only did such a thing when they had no prospects for profitable investments in their own industry. This would seem to indicate that there were no large pools of oil waiting to be tapped.

Realizing that the example he cited in that post, Exxon, might be a badly managed company, Wonks Anonymous decided to check the behavior of another oil company, BP Arco. The annual report for 2007, you can find it here, shows some $21 billion in profit. At the same time the company shows $756 million in exploration expense. In 2007 BP paid $8 billion in dividends and used $7 billion to repurchase shares - another way to send cash back to its investors. The grand total of cash sent back to the investors is $15 billion. It has kept its own cash holdings relatively constant.

BP operates on the West Coast, It is the major producer of Alaskan oil and would probably be ready to drill off the coast of California. BP does not seem to be making provisions for any vast increase in oil production.

Maybe there really isn't much there?