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I'm with starling and they usually take 3-4 days post payment date to show up in my account - havent had any in HL either yet
Something is wrong with those figures. Current oil demand of 102mmbpd + 23% = 125mmbpd
Again !
Onwards and upwards :)))))
I find the new invites to move into CCS very appealing as the market for it seems to be growing at a very fast rate right now, with a 14% CAGR now until 2032. Government incentives are making this growth realistic as beneficial as investment tax credits and funding are being pushed, and for BP and others to capitalize on this, they are right now taking the necessary steps in my opinion.
Final Words
As for my final words about BP, I think the valuation right now looks very appealing. A p/e of under 6 makes it trade under the sector's average of 8.7. Some risks are Brent oil has been on a steady decline, but I think that in years, it will eventually normalize and BP will have plenty of time to accumulate strong cash flows and distribute a significant portion of it to shareholders. The incentive here for shareholders is to remain invested as BP is spending heavily on buying back shares. Until Q2 2023 the outstanding shares are expected to be reduced by nearly 2% as BP aims to deploy $1.75 billion for buybacks.
The massive presence that BP has accumulated over its 113 years in the energy business makes its position almost grown too large to fail. A phrase that shouldn't be thrown around too easily. But BP has done very well in pursuing and being selected for several governmental projects, like the CCS projects in the North-East of England. As a result, BP is a buy for me, and as long as Brent oil prices remain above $60, BP will continue to deliver strongly in terms of FCF and EPS growth.
As for where BP sees the remaining year going, capital expenditures are to be between $16 - $18 billion, up significantly from 2022 which was $12 billion. I find it likely that we don't see significant growth in the FCF given this upswing in the capital expenditures on a YoY basis. The outlook the company had regarding buybacks is that they will be able to commit at least $4 billion towards repurchasing if Brent barrel prices remain at $60. But it would also include an annual raise of 4% for its dividend yield.
The oil production the company had in the first quarter
Oil Production (Q1 Report)
Lastly, the predictions from the quarter remain in my opinion very strong given the lower Brent oil prices we have compared to the 2022 levels. Production volumes were up across all parts of BP, the liquids, natural gas, and hydrocarbons all showed signs of strength. Now it's up to BP to maintain this momentum and prove that investing in this sector remains attractive.
Risks
As the revenues of BP are largely driven by commodity prices, the risk that investors will have to face is buying a company that might experience volatility in revenues as a result of an unstable market environment. That has been the case with BP where revenues have been largely up and down the last 10 years or so. But I think the growth trajectory remains strong as oil is still a very prevalent way for us to generate energy and will continue to be for many more years. The prices for Brent oil seem to have been in a consistent decline for the last 12 months and that does make the EPS estimates for BP hard to be sure of. Downward revisions are very much possible if the market shows weakness or demand diminishes.
CCS Projects Potential
Touching briefly on the CCS projects that BP is moving into, it looks promising. BP has signed an agreement where they will take a 40% stake in the Viking carbon capture and storage project in the North Sea. That makes for three BP-led projects that revolve around hydrocarbon and CCS in the North-East of England which the UK government has chosen BP for.
But apart from that, BP also announced plans for a low-carbon green energy cluster in Valencia, Spain. The project aims to refine up to 2GW of electrolysis in total capacity by 2030. All in an attempt to make the BP Castellon refinery a world-scale green hydrogen site.
Looking at the latest earnings from the company, they made it very clear they are intending on maintaining a strong conversion of FCF to distribute to shareholders. For Q1 2023, they distributed a dividend of $6.6 per share to their shareholders, and they have consistently maintained a strong dividend yield for their investors. With that dividend, BP has a yield of 4.56%, making it very appealing as a dividend addition to a portfolio in my opinion. Now there are better yields offered by other companies in the same industry, but where BP pulls ahead is the significant buybacks. The dividend and buyback plans seem to remain strong as BP generated $7.6 billion in operating FCF to start the year.
Some highlights from the last report
Q1 Highlights (Investor Presentation)
Over the last few years, BP has made strong progress towards paying down their long-term debts, and Q1 was no different in the TTM as BP has paid down over $13 billion in debts which results in them reaching a net debt of $21 billion. That means BP has a very low net debt/EBITDA of just 0.35 right now, highlighting the solid position the company is in currently.
The history of debt for the company
Debt History (Macrotrends)
The net debts peaked at around $63 billion but have since come down a fair bit. Looking ahead, I think that BP remains strong enough to maintain its current FCF plan where 60% of the surplus is going to shareholders.
BP's solid fundamentals, strong dividend yields, and share buyback programs make it an attractive investment in the oil industry.
The company is focusing on low-carbon energy solutions and carbon capture projects, which have a growing market demand.
Despite risks related to volatile oil prices, BP's valuation and commitment to shareholder returns make it a buy recommendation.
Offshore Oil Drilling Rig at Dusk near Huntington Beach
Jeremy Poland/E+ via Getty Images
Investment Rundown
Where much of the appeal of investing in the oil industry has come from is that companies quite often deliver strong dividend yields and buyback programs. That seems to remain true with BP p.l.c. (NYSE:BP), a company that had a very solid start to 2023 and announced they are buying back shares worth $1.75 billion before they even announce the Q2 results of 2023. That sort of news makes BP out to be a very intriguing investment for people seeking exposure to the industry, but also want a position that consistently appreciates.
The fundamentals of BP remain solid and with 40% of excess FCF dedicated to improving the balance sheet, the company has done solid work over the last few years. The industry has traditionally traded at a pretty low multiple, but even now BP is valued under the industry's 5-year average p/e of 8.7. In my view, BP deserves a richer multiple given the solid fundamentals and the dedicated capital going towards buybacks and dividends. I am rating BP stock a buy.
Company Segments
Within BP, there are three major business groups, these being Gas & low carbon energy, Production & operations, and lastly customers & products.
Within the first segment, they focus on low-carbon energy solutions such as wind, solar, and hydrogen. Recently, they are also moving into CCS projects aiming to capture carbon and reduce pollution. This is a relatively new market but one that sees strong demand and capital going towards. Where BP sees itself creating value here and generating revenues is through its integrated gas & LNG business, but also with gas trading and power trading.
The second business group is the operational heart of BP as it focuses on the production of hydrocarbon energy. Finding new prospects right now mostly circling existing projects and exiting hubs. This business group is also involved in the operations of oil and gas production assets, as well as refineries, terminals, and pipelines.
Lastly, the customer & products group focuses on driving new business initiatives for their customers and creating value through partnerships, and optimizing their many fuels value chains.
Earnings Highlights
Y
Sharefall, can you see Zelensky giving up Crimea and Eastern Ukraine ? Officially in Western circles, Crimea still belongs to Ukraine so he wants it back physically as well. Oil prices aren't historically high if one compares the current prices to other things v 20 years ago, eg Wages.
Yll, Yes peace in Ukraine, Putin and his mad regime replaced by a democratic one, eg under Navalny's party, (and Putin's body hung upside down outside the Kremlin after being tortured for days), Oil to gravitate to USD80, Inflation to drop to 2%. That's my letter to the gods !!
Let’s all hope for peace in Ukraine, oil price to drop and inflation to come down.
The big question is what does mad Vlad do now? Does he get really mad and in order to restore his image go full bore into Ukraine? Cant see him throwing the towel in - not his style. Or does Russian military morale collapse?
This just raises the levels of uncertainty.
There have been more twists and turns than a twisty turny thing.
At least short term it takes the pressure of Ukrainian civilians as don’t think they will be a priority target for the next wee while.
Putin not the type to go quietly,but there has been a nasty habit of Russians falling out windows and similar.
Fear can make him desperate so really hard to predict what he does next.
Never ever thought he would invade, as until he did he held all the Aces.
Let’s hope for a quick and positive solution for all.
And if he is replaced , let’s hope it’s someone who wants to talk
Theaky, with respect, nope. Prighozin has said the war was a mistake and it will make it much more likely that there will be a negotiated settlement. IMO.
What it will do to oil prices, I have no idea however. Would be good to hear views from others. ATB
This could be catastrophic for Ukraine.
Putin in all his insanity has refused to use tactical nukes. Would the Boss of the Wagner mercenaries be so restrained.
These developments could spiral out of control very quickly.
Busman1, and then you woke up lol... let's hope that all the internal strife in Russia will give Ukraine an advantage.
Putin kicked out , russia pulls out of ukraine , rosnet freed up, dividends earned go to shareholders ?
The steak was brilliant, the wine was top notch and I'm happy to sit tight on the hefty remainder of my BP shares.
It's great to be alive!
WP
It was a 5 year plan,so it’s getting about the time when you start to design your new 5 year plan.
As you say the underlying business continues to perform very well.
In 2020 they were designing the business for the future.
The future is here and it looks good financially,but maybe not quite there on sp just yet.
y-11 is that year eleven? teaching or pupil? either way bog off back to harbour ou just stop oil ******
Me or you please stop given out advice your still not sure and it’s 6 months out of date! I tried to advise you which has now turned out to be 100 percent correct. BP at £4 not too long now.