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BG Group: fair dinkum: The U.K.’s BG Group will want to avoid becoming the butt of another one with its Australian Queensland-Curtis LNG project in which it has a three-quarters stake. On Wednesday, BG said it had sold a pipeline attached to the project — to move gas from wells to plant — for $5 billion. This means that BG can get serious on the project at last. Good: QCLNG will represent two-thirds of production growth next year, says Deutsche, and according to BMO Capital Markets, is a quarter of BG’s net asset value. But that assumes oil prices of $80 a barrel. There is also BG’s debt. As a fast-growing explorer, BG has not had any free cash flow (post capital spending) since 2008, according to S&P Capital IQ. That figure is also before dividend payouts. At least, having got a good price for the QCLNG pipeline, BG can use the proceeds (after taxes and expenses, roughly $4.3 billion) to reduce its net debt of $12 billion. But that is only step one, considering investors already pay up in the market for BG’s superior production growth outlook versus other oil majors. With an enterprise value to next year’s forecast debt adjusted cash flow of 9.8 times, BG shares trade at a 50% valuation premium to its peers
don't expect wti to fall below $60, so a bounce on both wti and brent could be due. Even if it does fall further, at these levels it's almost guaranteed that oil will be above this level by the end of 2015, and that's at the very minimum. If oil stays this low till tomorrow morning, I expect BG to open at around £8.50, and I will be in.
Dec 9 (Reuters) - British gas giant BG Group Plc said on Tuesday it sold its wholly owned QCLNG Pipeline Pty Ltd subsidiary in Australia to APA Group for US$5 billion. The company said the deal is expected to be completed in the first half of 2015 and is conditional on the start of commercial LNG deliveries from the QCLNG export facility at Gladstone and on partner consent. This is the biggest sale by BG since it earlier this year announced plans to look at asset sales across the globe to monetize some of its investments and return cash to shareholders. BG Group had earlier expected to finalise a roughly $4 billion sale of gas pipelines in Australia's Queensland state by Christmas. "The sale of the QCLNG pipeline is in line with our strategy to focus on BG Group's core areas of oil and gas exploration and production and LNG," Andrew Gould, interim Executive Chairman of BG Group, said in a statement. BG said the transaction is expected to result in a post-tax profit of approximately $2.7 billion. The company also said it expects sale proceeds will be used to reduce net debt and fund future growth.
Starfish first gas from first well started Saturday 6th of Dec. @ Trinidad and Tobago
Saying as low as $44 or something similar in q2 2015 - never going to happen. They also predict for $70 for the whole of 2015 and $80 or thereabouts for 2016. Like Pipk says, tuck these away for a while (as well as most other oilies) and there could be some decent rewards in the long term.
Expect a bounce in the coming days. Very surprised at how well the oil share held up today, could've easily seen another couple of percent of each in the sector. £8.50 will still be pushed.
after that, wait a year... £12 minimum target
Lively.....Invested thru 3 oil crisis and every time the big boys came back bigger and better.....watched projects cancelled, stopped in their tracks and personnel esp. Contractors terminated....dividends remained much the same....so will price recover the answer is yes....... unless of course the earths hit by a good sized comet......
Can it touch? Can it ever recover lost ground?
At these prices an excellent stocking filler ......cold weather around the globe kicking in, Prod on the increase.....so no need to cross fingers.....tuck them away For 9 mths then enjoy.....merry Xmas to all.
maybe not as much as other oil companies, but still see this getting sub £9 again... long term strong buy though.
Temporary aberration. BG's LNG business offers protection against oil price fall. This price offers long term capital growth, short term beats leaving it in the bank and in this climate is vulnerable to a bid.
soon
Has we know there been speculation for a few years but the price being touted was £16 to £20 a share now they talking £14 thats cheap so I its now or never for Exxon and Shell to get BG or BP on the cheap so by of 2015 I think one will be gone may be the 2
Looking at history of Shell and BP any linkup (takeover in She'll speak) would have been impossible 4 yrs ago, now 'bearing in mind where BP operate and Shells history in Africa' looks to be < 5%, Now look at BG then you have a different ball game ' GAS' and lots of it, NGL plans strategically placed v Shells, excluding Egypt....lower political risks....who needs Obama / US politics......stuff everyone but our own....makes a Shell swoop on BG a 50/50, throw in Tullow it even looks better ESP. With SA crying out for Energy.....also lets She'll dump the numpties in BG and let the new CEO do the buiss with some good...no..excellent....new Shell staff.......but they better be quick..Statoil are also well positioned to swoop.....bit like the the days of the l. Ships........note the smaller Ops are re-organising so whatever happens prices will rise after the cleanup.
Having had deserved hits to the share price with successive profit-guidance misses, the current setback in BG Group is largely attributable to the near 40% fall in the oil price. Attempting to forecast the oil price may be regarded as foolhardy, but the product is so important in the global economy it is important to have a view on where the price is heading. What we do know is a low oil price leads to cuts in investment in future production - leading to a potential large upswing in the oil price. Note too that this global supply has come from the ‘shale’ revolution, tar sands and very deep water drilling - all very expensive unconventional production. Indeed, with oil below $70 small shale produces in the US will struggle to survive with many potentially defaulting on their loans. It is important to realise large emerging markets consume half the total of crude output – consumption has outstripped production over many years with the shortfall being met from reserves. The global oil industry has failed to keep up with demand and without a sudden global recession, oil prices will move up and potentially fast and into triple figures again. Our view: BG Group seems to have acted swiftly in calming down the extensive shareholder questioning and concern regarding the remuneration package of Mr Lund, who was recently appointed as the CEO of the Group. According to the new arrangement, 62% of Mr Lund's remuneration package in the first year will now be subject to performance criteria including total shareholder return, cash flow and efficiency measures. Mr Lund’s pay would also fall within the ambit of the remuneration policy approved by shareholders in May, meaning it will no longer be put to the vote. Nevertheless, what’s more important is that Mr Lund will be joining the BG Group by March and help build the business. Apart from the above, we remain confident of the company’s assets potential, technical expertise and its medium-term growth capability. We believe BG is oversold and well placed to benefit from any reverse in the oil price. Its assets in Queensland and off-shore Brazil are all on target and are not reflected in the current share price. We maintain a BUY rating for the stock.
I suspect both oil and BG will be mostly a sine wave trace until news/sentiment changes one way or the other. GLA
think it will push towards $66 by friday
Now they,ve cut the new(if he still comes!) CEO,s remun to a reasonable level.....let's hope they cut the numpties who sanctioned it in the first place.....prob same people who took so long to find the replacement for C.F. Looks like the old Marble Arch / Old Boys still a plague in the board room.....
I saw a ~£2m buy wizz past 30mins ago. Interesting to guage how much Lund's package concerns were priced into this along with crude prices.
£3.6m buy
*missed the term "breakeven price" :-/
Interesting article details BG Group oil at ~$40/barrel. Not sure how accurate this is but makes for a good read. Interestingly the current crude pricing is driven no by lack of buyers but volume. On the plus side at these prices crude customers should be filling their boots and it should be great for the global economy. GLA DYOR http://www.telegraph.co.uk/finance/newsbysector/energy/10056419/BG-Group-plots-future-on-LNG-and-Brazilian-cash.html
if all the gold in the world disappeared over night ,we would just put something in place of it. (bitcoin or similar thing)and soon things would be back to normal ,if all the oil disappeared life as we know it would end at least for the lifetime of anybody on earth now .The present glut is just that the present glut ,my prediction is oil will hit over $150 within 2 years ,and be back over $80 within 3 months .