Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Jeffrey. Your spot on buybacks are a waste of time…
As for UK ftse stocks v world stocks, that’s another question!
We’ve unperformed for decades versus US because of GBP v US$
If we compare some gains here v UK stocks from 1994 to 2023 October 26th
XOM +750% plus dividends( USA)
SHEL 144% plus dividends in that period
BP. 320% plus dividends
CVX. 700% plus dividend's (USA)
OXY. 5800%! plus dividends ( USA)
including
BHP + 1,025% ! Plus dividends along the way!!
Diamondback Energy +780% (2012-2023) + dividends / special dividends (USA)
COP +950% plus dividends(USA)
I wonder if we are in the mix. Committed to spending 500$ million so would make sense..?
https://oilprice.com/Latest-Energy-News/World-News/Exxon-Mulls-Sale-of-Vaca-Muerta-Shale-Assets.html
£100m trade is with undoubtedly a fund manager or pensions buying
Sorry folks but buy backs are a waste of time... Total manipulation that does nothing for shareholders.... Look at our SP and Div rate... Appalling given the OP.... Basically all UK O and G screwed.... Hope I am wrong
Cheers GfG: googling the article was a good trick! Also an interesting read.
I guess for a PI the merits of buybacks depend very much on the individual’s reasons for investing (gain or income) and the likely timespan they’ll hold the shares.
I like some volatility plus overall capital gain in the sp in order to profit from trading, earn a divi AND see an overall capital gain - I like to have my cake and eat it (several times over if possible).
However, I have to confess that my go-to argument to justify my point of view - a comparison of Shel & BP with the US companies that maintained their dividend is no longer as convincing as it once was, possibly because the divi is being restored AND debt has been reduced, whilst CVX have had a few issues of their own to resolve. Today, Shel and BP have overtaken CVX in the capital gain game from Oct 2020. Only XOM is now outrunning them all:
https://invst.ly/13kxmc
I’m not about to eat my hat or my words but I do have to accept that, over a long enough period of significant buybacks, some benefit may start to emerge - I still don’t like the fact that it can’t be measured, it doesn’t translate directly into £’s in my pocket and I don’t have as much control over how I maximise any gain I get from it. So you can still call ‘em ‘buyobacks’ to wind me up! ATB
Boyo - its an interesting read - you can get in by googling the link. My take on part of what is said is the view that the supermajors are using buybacks to manage the inevitable decline of their share prices on a yearly basis over time. It fits with one of my perennial views that; its not just about the buybacks upside on the share-price, but also where we would be SP wise without heavy buybacks. Just interested to know your view on this.
Ha GfG! I couldn't read it without subscribing - but I'm guessing their view was positive to which my response would be:
'GofCompare Shel's sp to XOM and CVX since the nadir of October 2020 and also remember that the dividend cut has gone into buybacks rather than directly into yourfpocket' .
I was hoping to see the sp break above the red trend here yesterday:
https://invst.ly/13kkeg
Hopefully we'll see green prevail by the end of the month.
Oil market tightening:
https://oilprice.com/Energy/Crude-Oil/The-Oil-Market-Is-Tightening-to-2016-Levels.html
Warm Winter Drags U.S. Natural Gas Prices to Three-Decade Low:
https://oilprice.com/Energy/Energy-General/Warm-Winter-Drags-US-Natural-Gas-Prices-to-Three-Decade-Low.html
Https://oilprice.com/Energy/Crude-Oil/Major-Oil-Companies-Make-Moves-in-Megamerger-Frenzy.html
WTF 😬
Huge trade gone through
Shell up for grabs ??
Investors Chronicle view:
Https://www.investorschronicle.co.uk/news/2024/02/15/are-shell-and-bp-s-buybacks-good-for-shareholders/
I wasn’t around to add a trading tranche during this afternoon’s dip below 2430: https://invst.ly/13htqg
I anticipate that the sp will return to fill the gap to 2566 over the next month or two provided OP continues at around $82 but I currently doubt that it’ll push much higher than that without a further increase in OP, as this comparison with Brent demonstrates: https://invst.ly/13h-oz
Considering we are the 2nd biggest producer in the world with about 16% and that it generates around half of our profits this can be a bad thing..
Even Prelude might may it’s way at some stage..lol
https://www.shell.com/energy-and-innovation/natural-gas/liquefied-natural-gas-lng.html
https://www.reuters.com/business/energy/global-lng-demand-seen-rising-more-than-50-by-2040-shell-report-2024-02-14/
It's worth bearing in mind the increasing revenues predicted from LNG.
According to the firm’s LNG Outlook published today, demand will rise by 50 per cent by 2040 and global LNG trade will grow to around 625-685m tonnes per year, up from the 404m tonnes traded in 2023.
“China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas,” said Steve Hill, executive vice president for Shell Energy.
“With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution.”
Also to add to the SP equation is the current vulnerability of BP, which is still paying for the Deepwater Horizon disaste, although this is coming to a close now. The costs of this were estimated at $65 billion in 2018. So with growth wouldn't BP be worth almost as much as Shell now!
For me the market is not going to hit anywhere near the £27.27p of the 16th October 2023, as Ex-D approaches. All the vagaries of slowing of demand, is inflation sorted, when will the first interest rate cut happen etc Heavy pre-election political influences dragging the price. Biden pushing the Permian output to the point of being a "swing" producer with up to 5.4 mbd, or the equivalent of 5-6% of daily world demand. India and China slaking their demand on cheap Russian oil. Both a demand distorter and price suppressor.
Disruption to World trade emanating from the Gulf having minimal impact on price, war all over the place again having little impact on price etc. The market is very distorted from reality at the moment. I've been waiting to trade for some time now, but have not done so & personally I am not persuaded to at the moment. I tend not to average up and down & rather if the decision looks right to me I bailout altogether.
I think Boyo's latest graph is really explicit on this. Although I think the OP will carry on strengthening, they are choppy unpredictable waters for trading as far as I am concerned. If the booby prize is receipt of another dividend I will not be unhappy for now. Good luck guys.
Ha! Ordinarily I'd agree about the seasonal pattern, Littleaston - just don't look at what happened last year, when we had to wait until September for January's OP highs to be surpassed: https://invst.ly/13eyh0
The sp also stayed below 2475 after March for much of the year until September and October.
So, I am definitely a mug, as I am waiting for the oil price to rise, so I can offload some shares at a higher value than it is currently. We should creep up as more oil will be consumed as oil is lower price in January.
Predicting OP is a mugs game isn't it GfG? Still, there's always a mug who'll try...
A quick look back at OP over the last twenty years is interesting.
The chart below of Brent is a weekly one, with an annual (52 week) moving average in blue and a five year moving average (orange) and greyed areas indicating periods when OP dropped below $70 - accounting for about 45% of the time:
https://invst.ly/13eudf
It’s a reminder that OP today is cheap compared to the four years (2011-2014 inclusive) when OPEC was not challenged by the boom and bust years of US shale. A period during which many small shale producers were forced to overproduce in order to cover the cost of their debts. Since the last ‘bust’, triggered by a price war with OPEC followed by COVID, the weaker companies have gone and there is now more discipline in the US. Nevertheless, production there will probably keep the price below $100 and the question is where is the ‘sweet spot’ that satisfies the powerful producers? And what price is going to be high enough to sustain exploration for replacement reserves and stimulate green transition? Cheap oil is not as good as it sounds for society.
My guess is that, much as US Presidents would like to see WTI around $50, the price for Brent is unlikely to fall below $60 in future, with the mid-point somewhere between $60 and $100 - so maybe averaging around $75- $80?
Apologies on the dividend:" BP also hiked its dividend by year-on-year 10%to 7.27 cents a share in the fourth quarter."
BP's results have been well-received - analysts views seem to vary between "profits plunge" on a replacement cost basis & the 4th Quarter 2023 being ahead of forecasts at $3 billion - so choose your weapon really.
A lot of soundbites like cost-cutting, choosing the highest project returns. delivering a simpler more focused and higher-value company. Maintaining the dividend & increasing buybacks to entertain shareholders. It seems to conflict with the continued strategic development of renewables though, with often low, spasmodic, unreliable profitability.
I can't help thinking that when the euphoria disappears from the results and the realities set in again: "if you do what you always do, you get what you always got!"
The first half hour of trading this morning has repaired most of the October 31st damage to BP and restored it to near par with Shel - with BP down nearly 9% since Oct 30th and Shel down 7%: https://invst.ly/13bafn