Member Info for Boyobach

Yes - Well done Dodger and very sporting of you to leave enough space for others to have had a fighting chance!

Summary of the week: OP down $5, G down 3x5 = 15p
Ok - it was nearer 16p
Maybe the 1p was a conspiracy or pesky MMs?
Nope -I don’t think so really. Do you?

https://invst.ly/bc1im

‘Nothing to see here’ to quote Hawkey.


Good point JL.

Yes Jim - you can see why people would say 'never sell Shell' ....when I have I've usually regretted it!

Yes Leem - hopefully we'll start to see progress on those issues now there's cash to fuel progress.
CoV: They were small quantities in general weren't they? carefully avoiding driving the price up - ie absorbing what came onto the market at low levels. I'm assuming PI's but am I naive ? Antiquenick seems to think MM's play games - I don't know enough about the mechanisms to offer a view. All I do know is that the Oil co's I regularly compare (RDS, DNO, GKP, G and PMO) seem to have a fairly consistent relationship and you can quickly spot when one goes out of step - as G did between 1st May and 18th June . On the face of it the buybacks have restored G's relative position - unexciting as it is. ATB

It’s worth noting that whilst OP is down relative to pre-buyback, G is around 10p up. The buyback has restored G to a comparable level in relation to the ‘others’ in terms of performance since G reached around 230p and oil peaked at near $75 in April:

https://invst.ly/bb9hz

Of this group, only RDS has ridden out the fall in OP since April better, with G and GKP broadly comparable.

bunks:
The buyback gathered up shares from those who were inclined to sell at a low price relative to OP - this should (and has) improved performance against OP but it does not (and cannot) protect the sp if OP falls. Today G is about 10p up on where it might have been given $63 OP had the buybacks not happened. Just look at DNO and GKP here (and remember that GKP is also doing buybacks): https://invst.ly/bbr5j

177p tomorrow posted at 1600? Really?

Unfortunately, bunks, it can't be ruled out on the numbers. But I should declare that CoV and I obviously share some interest in a potential buy point. There are two reasons that 177 may prove over-optimistic for a buyer:
1) The buyback has so far lifted G to a 3x $Brent sp, so at Brent= $60 the sp might just hold at 180p.
2) OP has bounced slightly - (was that because of today's drone shooting by the US?) - If $62 holds then G should find support around 183p +
From a 'buyer' perspective though, 177 only represents a weakening to 2.95 x $60 Brent and that OP was seriously on the cards this afternoon (for OANDA as well as LCO) . Which is why I posted the comment (on the other thread) 'it could be a risky prospect {to buy} at 188 or even 183.'
I can't find any bullish comments about OP tonight - so I'm bracing for the worst....

Saudi Oil production at $4:
Saudi energy minister Khalid al Falih also said that the audit determined that Aramco, Saudi Arabia's national oil company, has the lowest cost of production of any oil company, at about $4 per barrel. This makes Saudi oil the most profitable in the world. (Forbes 9 Jan 2019)

So oil needs to be at least 60$ and for some countries such as Saudi much higher (80$) ......
Be careful not to confuse the cost of production with the need for national revenues. Saudis could pump many producers to extinction based on their production costs alone. It's their economy and their capacity limits that held them back last time they tried it.

Yes CoV - similar reasons to me offloading around 20% at the end of the buyback.
I think we may well have an opportunity to top back up shortly. I never go all in/out myself - always keep the core holding and use trading profits to average the cost per share down. So whether it goes up or down I've usually got at least one reason to be cheerful.

Another poor day for OP - the main question being whether it will stay above $60 and, in that event, whether G will then remain above 180p. On the face of it G is already in ‘buy’ territory (on the lowest of middle three red trend here) but, with OP dominating the price at present, it could be a risky prospect at 188 or even 183.
https://invst.ly/bb1-t

All looks normal relative to OP on the weekly chart - with GKP obviously benefiting from buyback action, resulting in a slightly artificial looking price line:

https://invst.ly/bb1z2

G v Peak Brent (effectively re-based from October) puts it into context:

https://invst.ly/bb24w

Hawkey: Ooops. This time having bought at 203 and 230 ....

If it's any consolation, H, I still have a bunch of G shares at an average cost of 224p mostly acquired at the end of last summer. Even though my overall average cost is now back below 120p, I never loose sight of the ones that haven't 'paid their way' and will trade them for a profit at an appropriate time.

Buying as the sp comes up to a resistance level (like 230) is riskier than buying once it has gone above it and, hopefully , establishes it as a new support line. Equally, buying as the price drops to a support level (like 203) comes with the risk that the price will drop through - often worth waiting to see how solid the level is. Keeping some cash available and not being afraid to bail out if things go wrong can rescue a situation and help keep the average cost of a holding down. You, and a lot of us, were unlucky with 203 because the OP drop from $70 was sharp and largely unexpected and it came on the back of an already steep decline in SP. But by keeping cash back I was able to buy at the lower levels and turn a short term failure back to a profit - recently selling them at the top of the buyback price. Waiting for the max price when selling or the min price when buying rarely works in my experience - I just aim for good buy/sell averages. ATB

I can't agree with you, JL, about the buybacks not working. G produces and sells oil and is small relative to the likes of RDS - which can manage and hedge oil sales etc and play the market to make a profit whatever the OP. So G's sp will be more closely geared to OP and buybacks can only shift the price range relative to it rather than limit potential drops. Since the buybacks finished Brent has dropped back to $64 a price at which G just managed 176 on a good day prior to the buybacks. So the shares are about 15p up comparatively.
The buybacks were intended to be value accretive for the company and it's way too early to make a judgement on that. In any case, they have plenty of scope to continue the buybacks after the H1 results if they still feel the company is undervalued.
As Hawkey and Hydrogen have pointed out, there should be solid 'balance sheet' news (as opposed to intangible promises) on the 6th to underpin the price and hopefully raise it to a more appropriate level.

bunks asked: Why are we getting punished so much more more than say gkp yesterday and today?

GKP's sp is evidently being supported to some extent by their longer term buyback process. DNO is behaving much like G.
I tend to agree with Hawkey 'nothing to see here' because the sp is tracking OP in a generally consistent and predictable way as far as I can see.

Obvious Typo:
Prior to the buyback G would have been a lot lower at this OP- sub 180 probably....

Today’s sp may be disappointing but you can’t fault G on consistency: 194p for $64 (at the close) Brent = 3x on boyo’s ratio (other performance measures are available).
Prior to the buyback G would have been a lot lower at this OP- sub 280 probably.
https://invst.ly/balon
I guess I can’t complain: at around 188 I’ll have to consider some buybacks of my own:
https://invst.ly/balt1
Meanwhile, the others are doing pretty much as well as they were doing on November 21st - with GKP the only one making real progress but, to be fair, it was doing particularly badly at that time and needed to catch up….
https://invst.ly/balf7

I agree Leem - the fact that G's sp remains where it is relative to OP is indeed frustrating. If actual production and growing cash position do not make a difference soon then I'll be forced to re-evaluate my long term expectations regarding G and other oil related investments.

The issue for G holders is this:
Does G represent a good investment if it depends on a higher than average OP which, in turn, depends upon global crises in order to hold it above 190p? On an average Genel day, a 190p sp requires OP to be at least $63. We also know that OPEC+ seems capable of driving OP up to around $63. So, currently, anything over 190 is relatively good whilst, recently, downside seems a higher probability than upside.
If the level of global oil production is such that there is an excess of supply over demand then OP seems to collapse quickly and recover slowly. We also now have enough experience (10 months) to know how the market rates G in relation to OP. That relationship simply hasn't improved over the period despite increased production from existing resources and the imminent (oil) prospects at Bina Bawi and Sarta. Only a re-rating in terms of G v OP is going to produce the kind of sp apparently dreamed about by folks here.

At the close G’s sp was clinging to its 3x ratio to Brent $/bbl and also to the trend line that the buyback scheme just managed to perch it back on. Since then OP has taken a bit of a fall, with LCO futures possibly heading for $64 as I type. I’ve reverted to LCO as it’s the most commonly quoted Brent benchmark - OANDA and XBR crude prices usually track it very closely on a percentage basis but are up to $1.5 different in absolute terms, especially at the front month roll-over date.
https://invst.ly/ba1rc
The three amigos all took a dive together - ahead of OP, so word must have been out, I guess, and there may be more drops tomorrow unless it turns out to be a brief glitch.
https://invst.ly/ba1-0