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The "at pace" seems an odd qualification.
So it’s finally confirmed that the remaining Permian sale proceeds will be used for share buybacks from the RNS above.
“The remaining $5.5 billion of proceeds from the Permian divestment will be distributed in the form of share buybacks at pace. This decision was taken on December 31, 2021, at the first Board meeting held in the UK following the decision to implement the simplification of the company’s share structure.”
Very interesting points made by Professor Helm who wrote a report for government four years ago called the Cost of Energy Review. With bills doubling in April with the price cap rise it is clear there will be permanently higher costs on energy.
Professor Helm said on Newsnight tonight “if the primary aim of energy and government policy is cheap energy you can’t have decarbonisation.
We are soaked in fossil fuels, that is how we built the 20th century with them, if we want to fast track to very low carbon and decarbonise the entire national electricity grid in 13 years time you can’t pretend it isn’t going to cost anything and that customers can have cheap energy at the same time. It is the time of reckoning, either be honest and tell the public the inconvenient truth of the cost of decarbonisation or stop pretending you are actually going to do it.”
When it comes to Shell and Brent (or BP and Brent for that matter), it’s not always obvious which one is leading (anticipating) or lagging (reacting). Here’s Brent against RDS in 15’ steps since the market opened on Tuesday - bear in mind that Brent trades for many additional hours overnight, so the 8.00am moves can look a bit sharp or go in opposite directions: https://invst.ly/x1n-a
In reality, Shell does not influence Brent directly as much as the reverse, whilst Brent itself is under global market influences which are common to both. As I’ve observed in the past, it’s when they diverge over a significant period that something interesting is happening. Even as I’m typing this, Brent‘s breakout from Tuesday is continuing - if it breaks $86 then I think sparks will fly: https://invst.ly/x1o4z . Will Shell keep pace with it if it does?
Jim800: I do agree that PR has to be handled right (just look at Djokovic for a lesson in how not to do it) but I'm not sure that Shell can hide away success, or failure, completely. You might miss an elephant in the jungle... but in a brightly lit room ...
I think the SP reaction to Q3 was mostly about the market getting ahead of itself plus OP hitting a significant peak and pulling back.
I don't think Shell will say anything at the moment to improve price, they have 7.5B in buybacks which they cannot complete until A and B shares are combined. Current time table to complete this is beginning of February, so with sometime to complete purchases I don't think we will get any super good news till end of 1st Qtr , all current movement is industry or general business lead.
We'll only go green when we run out of fossil fuels. Before that we might boil the planet. Reforestation would seem the best option rather than chasing daft renewable options. As I have posted elsewhere can anyone really imagine a battery powered Airbus or cargo ship?
Anyway, it's interesting to look at RDSB/BP sp chart. They just about track each other. On that basis, BP would seem a better bet 'cos the dividend is higher.
Another positive.
https://www.reuters.com/markets/europe/exclusive-shells-nigerian-oil-assets-attract-interest-local-firms-sources-say-2022-01-06/
Planted any conkers yet Bald Eagle. mine are doing fine
Jim, Never, I think a lot of holders / posters would agree with you & it is always open to government to stop allowing companies to pay negative tax on their fossil fuel extraction and production operations in the North Sea. This would help appease any adverse public reaction.
Since the Paris agreement BP alone has received £490m & in the tax year 2019-20 BP received £39m, ExxonMobil received £117m in total from HMRC, Shell got £110m.
"Gas is not as green as grass though!"
===============================================================
But what eats the grass?....and what do those ruminants emit?
Hopefully we can agree, less grass, more rainforest!!.....ideally find a way to expolit the riches of the rainforests so that the economic need to cut them down is reduced.
Great post Jim,
100% agree.
The lower the overall profit the better longer term for share holders….
Just spend spend spend so results look average……..
Several posters (myself included) commented that Q3 results were deliberately expressed so as to camouflage good profits in some smoke and mirrors. Given current press appetite for fossil fuel windfall taxes I'm hoping Shell do something similar again for Q4 results. Big profits, big dividends and special dividends for Permian sale all fraught with the danger of making Shell look like a cash cow to solve the Govt's problem of how to pay for April's energy cap.
Low key profits, investment and paying down debt all much more politically / socially acceptable at present. We'll get the value one day, just not yet.
pastyc: Shell peaked at 1813, with Brent at nearly $86 on October 20th. https://invst.ly/x1930
It's marginally stronger against Brent today. The Q3 results seemed to fall short of investor expectations - which I felt had ramped up too steeply beforehand. With results it's often a flip of a coin. However OP also fell back after Q3 - so the two factors were in play.
I decided to take profits on one of my trading tranches (acquired at 1578) today as I felt the prospects for further gains in both Brent and RDS were cooling off after the EIA figures. However OP remains firm and has itself broken out as I've previously pointed out, so it could continue to head higher. As the Q4 results are still a month away, I think OP will continue to be a main influence on the sp in the meantime - unless there's some company specific news (concerning distributions, for example).
Nearly fell off my chair when I saw this. Pragmatism from the EU what's going on ?!
You can have your own views on climate policy and the energy transition but at last we have some thinking that is consistent with the stated aims. Transition will take decades not months or years - therefore it makes sense to do the next best thing in the meantime. Let's hope the UK govt grasps the nettle as well.
The activists will protest of course but the return of serve is that it is better to supply your own gas than import from someone else. Better economically and better environmentally (transportation, governance standards etc)
Think we got to 1815 in September?...Brent hit 87 dollars at that time. Then came Q3 results and we fell back pretty quickly to the low 1600's!!
Question is, can we expect a repeat after Q4?
Tis like somebody lit a rocket under the SP recently! Most satisfactory....
... meanwhile, Brent is also in a breakout pattern. Is it sustainable? https://invst.ly/x13bv
With today's further rise, Shell is now 'spot-on' the relationship it had with Brent at the close on Christmas Eve: https://invst.ly/x1377
For now the sp appears to be tracking Brent - the EIA weekly report comes out later today...
Gas is not as green as grass though!
"You couldnt make this up......."
===========================================================
I suspect it is about the amount of CO2 the energy source releases.
Nuclear is costly & creates problems with waste but doesn't emit much CO2 (especially compared to coal). I also saw a domestic heating system that used gas, which was converted into hydrogen & the hydrogen burned to release water.....expensive, impractical on large scale but technically 'green'!!!
You couldnt make this up.......
https://www.france24.com/en/europe/20220101-eu-plans-to-class-nuclear-power-and-natural-gas-as-green-energy-sources
I guess with carbon credits and offsets you could even make oil green with enough slight of hand.......
The world is realising that its not just a straight swap from old to new fuels.....And will take much much more thought. I think Europe are already having this discussion with their current unsustainable gas price.....
Q 4 is going to be a monster for Shell. no doubt about it.
For a start LNG production is expected to be much higher than previous quarters. Then ofcourse you have the high price of brent.
However at exactly the same time we announce this the prices are likely to rise for domestic users by over 50% from current prices.
So I would imagine that Shell will have to play "hide and seek" with some of this money to stop a huge windfall tax.
I guess investing a hell of a lot would be the way forward on green or gas projects and I do not they have had their cheque book out a lot recently.
Any thoughts ???
Perhaps today’s jump in SP should not be a complete surprise given the movements in Brent that have occurred over the last week whilst the LSE has largely been asleep. Here’s a 15’ view of Brent, Shell, BP and Chevron rebased to Boxing Day - when Brent trading resumed at around 11.30 pm:
https://invst.ly/x0t9t
It would be fair to say that, despite today’s boost, Shell and the other majors are all slightly weaker against Brent than they were immediately before Christmas. In Shells’s case to the tune of about 30p (The 30 day MA of the Shell:Brent ratio is about 21.6)
So there could be a bit more ‘in the tank’ for tomorrow’s ride…although profit taking seems likely to hold the price back for now and the 1715 resistance may not be breached just yet
Last week's transactions in own shares at £16.20 ish looking like excellent business today.