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The only problem with what you suggest is by selling % to make up your income,next time your income has already dropped by 9% so to get the same income you need to sell even more.
That was my position ( and many others) after oil spill.
At that time my div was over £4,000,per quarter, then suddenly zero.
So had to sell some shares to pay a bill ( it was a holiday final payment).
Then some more needed sold each year as income much lower
Even now having managed to buy back shares I sold ,div is still half of what I was getting 13 years ago.
We each as you say have different personal finances
Whilst buybacks can be done on the scale they are currently, and with the share price so undervalued, they are my clear preference.
There are 9% less shares in issue than a year ago. We could look at this a few ways. Assuming you hold the same number of shares you could own 9% more of the company than you did with no action, or you could sell up to 9% of your shares to make up for the low dividend.
Obviously ignoring peoples personal tax situations.
Agreed we always have looked at what Shell are doing.
Although often BP was a leader,not just a follower ( eg first Super Major etc).
It’s also very good that a larger div will be more affordable due to reduced share count.
Debts are low enough to be no longer a real concern.
New financial framework
Debts to drop $1 b per year.
Share count to drop by at least 1% each year.
Rest to be paid in div based on $60 oil.
Surplus to be used for extra buyback events,as and when board feel it’s worthwhile.
Div always to be affordable at $60 oil,and break even always to be at least $10 lower.If oil below $60 for more than 1 quarter we accept that div should drop,you need to earn to pay out,not just borrow.
So we never undo the good work that has been carried out on balance sheet.
Just my wish list
It’s time to ignore the politicians,they have made it plain the don’t care about us.
As someone who gets why the financial frame approach we take is required, I do think it only stands up as long as shareholder returns are on par with competitors, if Shell move on divi's we have to move in my opinion so I can anticipate discussions are being had now re: buybacks and use of future capital ahead of Q2 earnings
Pretty certain Looney will have something to say later this Dividend week.
Be positive as SP shall go 'north'
Shell chief sets ‘ruthless’ new course to catch up with US rivals.
BP chief.............Silence
Good discussion over the below points - This and shell only moves because big boys place big buys - with no direct oil catalyst on the horizon many are seeing gains elsewhere (e.g. tech). Divi is no longer attractive vs. interest rates (in the UK/EU) so I'm surprised the SP hasn't fell further. The potential strength of balance sheet mentioned below is one reason for this. You do however wonder what happens going into northern hemisphere Winter, I'm still more bull than bear over this as the West seeks to limit Russian barrels and xNG on its shores.
Personally I think the news out of China re: slow recovery is the big downward pressure on O&G at the moment but I'm the CPC has some creative accounting to change the narrative shortly.
Lots of interesting points made.
I would say oil is priced assuming we are going to have a recession, short positions by institutions have hugely increased this year but supply is predicted to be short vs demand and storage is getting lower. BP priced likewise, it sure isn't priced on the trailing earnings giving a PE of 4.x.
There is scope for a short squeeze and fast rise in oil prices which helps push the world into recession.
Https://www.livecharts.co.uk/MarketCharts/brent.php
Dividend week:))))
Zac0_4
I was merely pointing out the amount of opportunities we've all had to buy in at under 4 quid over the last few years, something I did on many occasions.
You only ever needed a single opportunity to sell out some or all of your stock in or around £5-70, something I did and I've absolutely no issues whatsoever at anything above £4 quid.
Meanwhile, the few other companies I have left, that I didn't sell out to put into 5 year's of 5% and just over, are doing very well.
Happy..........Yes.
Happy
Nobody wants to quote inflation adjusted oil price figures,that would spoil the whole media and politicians spin on windfalls and big bad oil companies
Happy - I certainly hope H2 shows an improvement on the 1st half of the year. Although I've sold here I continue to have a long standing position in Shell.
Thanks Meoryou.
We should be looking at the inflation-adjusted oil price not just nominal. Inflation adjusted oil price is probably not much higher than historical average as inflation has been running very hot for 2 years. But I can't find a good graph online.
All IMHO DYOR
Happy
Happy
Although oil has been weak of late.
In reality it’s a very average oil price historically so not really too bad( just not as good as the good times).There does still appear to be support when oil price struggles,and the two oil price camps still appear as far apart as ever.
I’m looking forward to finally getting some financial figures on renewables, promised in next quarter results so we can finally start to judge how good or bad theses decisions have been.
Nothing goes up in a straight line. Oil shares have had a weak patch of late. Not just BP but even the likes of Exxon and Chevron.
There's been an obvious shift into growth and out of value. But I think the pendulum will swing again over H2 because on a cashflow basis, the energy sector looks very cheap. Also, O&G balance sheets are the strongest in a decade so I expect we will see some significant corporate activity across in H2 to take advantage of depressed valuations.
All IMHO DYOR
Happy
If bp is £4 before we are actually in a technical recession this will be bad as the share price may drop to below 365 before a slow recovery back to £5. BoE should just put rates up to 7-8 percent now and hold for 1 year to sort inflation out. If there is only a 0.25 percent rise we will have a market crash.
Meoryou - yes, I do know that opportunities to sell at £5.70 have been few and far between. Not plentiful as the poster indicated.
As you know I sold out early Feb. So far the 4 holdings I split my capital across have all outperformed BP.
Good luck.
Interest rates go up Thursday so even a better return cash in the bank. 1 year fix will get you 5.5 percent next week. BP offers 4.6 percent and most likely a drop down to £4 a share in the next couple of quarters.
Probably about 3 opportunities to sell out at £5.70 during that time period
But I’m sure you already know that.
Currently the good times as far as sp is concerned still appear to be an illusion.
The underlying business however is still a cash cow.
I’m sure you don’t miss the frustration of watching the BP sp.
"Been one of my best as well, plenty of opportunities to buy at the low price and sell out when it got hot around £5.70"
And exactly how many opportunities to sell at £5.70 have presented themselves in the last 5 years or so?!!!
Planit is correct on what he says,
Been one of my best aswell, plenty of opportunities to buy at the low price and sell out when it got hot around £5-70
Hold the cash and buy back as and when you feel comfortable, more money to look forward to on the 23rd aswell.
Buy now at these prices, because it's virtually a cert, that oil will rise again and we'll be comfortably back over five quid again and possibly going on six.
Only a 'Looney' wouldn't see this.
I've been saying this all along as have many others.
Looney went early and he went hard on a quest to "save the planet". And he's wasted money on crown leases, Archea, Travellers and any amount of other rubbish. Money that could have gone directly into shareholders' pockets.
That said, BP represents stonking value v US peers. If he can't fix the valuation, a US predator will do it for him. If the Republicans win the Presidency, the green bulcaca will become especially useless. Either way Looney faces a day of reckoning.
All IMHO DYOR
Haapy
Owldwodger,
I couldn't agree more. Looney has made some decisions that have cost BP a fortune, and thats not before opening his mouth with ill thought out statements like "we are a cash machine". His green initiative's are costing billions with nothing but a few "service stations" to show for it. His decision to cut 40% of oil production (reduced to 25%) whilst Shell and other have stated "drill baby, drill".
And yet his salary balloons to millions whilst shareholders suffer with poor leadership and bad returns.
The dividend is still 37% lower than pre-pandemic levels.
I for one, would certainly love to see Looney walk the Plank.
Cheers.
Nice idea but it will never happen