My take2 Nov 2016 10:11
I was fairly pleased with most of the update. Lots of opinions on the bb for and against.
Hedgies is right in some aspects, they cant keep borrowing to pay a divi but Shell see this as a transition and temporary situation. There will be headwinds, POO, selling bits and cutting costs will all affect how long "temporary" becomes. There is a fear it becomes the norm. Their own 30 percent gearing limit was above expectations as some of the levers were slower to operate ...... but they still can be. They reported lots of positives coming soon including profits at lower poo levels. I also think opec wont agree a meaningful deal.
Of course in a worst case scenario debt could keep rising and something would need to be done with the divi but I think a more realistic case is it will be managed but its going to take time. That time will depend on all the factors above. The cost of BG has been consumed, new projects coming on stream so Shell is doing its bit. The poo is out of its hands. The higher the better for Shell and my divis but not my fuel tank.
Stricklyslick - Will it go over it self imposed debt limit, it could but again I think it will be short term if it does and they are working hard to avoid it. Things could still move slower than they expect like last time. As long as there is a route back, which currently there is, credit ratings will be ok.
mesca - ignore the brokers and the SP and do your own thing.
Hedgies, 25bn is not cutting to the bone but why start extra things if you are going to loose money. Lots of things canned due to fall in poo so only more profitable projects getting the go ahead.
FJG spot on with the webcast made me a much happier bunny. Its always the Q&A that brings out the best bits afterall shell want to spin to the positive.
So for me I'm going to keep collecting the divis and give them the time to get stabilised, stop the script, reduce debt and then up my divi's. Hopefully sooner rather than later.