Member Info for getafgrip

You will find that a 60% reduction on $60 billion net debt is actually $36 billion NOT $24 billion!

Pontificating and patronising, but not very hot on accuracy, analysis or interpretation of facts! Looking on the positive side though, this is a significantly greater degree of accuracy than you are generally capable of displaying!

MG -"This is S&P short term outlook due to BP’s net debt position creeping up a LITTLE from £21.7 to £24B." Surely a £2.3 billion increase in net debt is significant - + 10.6%.

You also quote" BP's net debt rose to $24 billion in the first quarter of the year, compared with $21.2 billion a year." Depending which figure you consider correct, this is an increase in net debt of 13.21%.

S & P stated: "S&P Global on Monday, however, said BP's plans will likely see the oil major struggle to reduce its debts, even with the currently supportive market conditions.

"We forecast BP's revised cash allocation strategy will not result in meaningful further debt reduction," S&P Global said.

This is set to see BP fall even further behind its rivals Chevron (CVX), Shell (UK:SHEL), and Exxon Mobil (XOM) which all have markedly stronger balance sheets than the FTSE-100 firm, S&P Global said.

At the end of 2023, BP's funds from operations (FFO) to debt ratio was well below its peers at 41.9% compared to over 75% for Chevron, Shell, and ExxonMobil.

"The gap in terms of balance sheet strength between BP and the other supermajors will likely persist, and not narrow," S&P Global said.

S&P Global said it expects this gap between BP and its peers will continue to widen, despite the supportive market conditions that are set to see it post a "solid performance" in 2024 as it pushes ahead with cost-savings initiatives in its upstream division."

SH - that is exactly right. The S and P debt downgrade is significant for BP as it would be for any other major company. As a heavily indebted company BP is suddenly paying more for that debt. The current projections for distributions are simply not sustainable. It speaks volumes that BP has to be informed of this by outside organisations, rather than having the wherewithal to work out the dynamics at play and impacts for themselves!

This thread is so focused on ignoring or suppressing any facts negative to BP that it has become a mutual appreciation echo chamber. Informed comment, and there are many posters who are capable of this, needs to be objective or it serves no purpose!

I think the slump in oil prices at the time & companies spending more than they were earning, were more important factors than the political scene in the NS loss of jobs. If Labour say abandoned the NS now it would be a purely political rather than economic decision:

https://www.bbc.co.uk/news/uk-scotland-scotland-business-36491937

I'm not sure how many manifesto pledges will be burnt after the Election, but it is usually quite a few!

Think about it 100-200,000 well paid, highly skilled jobs, skills that are transferrable throughout the world, in areas of the UK that are generally desperate for the companies and their workers! Once in power with significant economic issues, inflation, interest rates, migration etc to deal with is the first thing on the agenda going to be closure of the North Sea! NO!

Buy-backs are currently at a level being sustained at the expense of erosion of BP's credit rating as announced by S & P. At a time when oil companies are awash with cash, BP with a finance-qualified CEO, has managed to build a high level of debt and increase its borrowing costs in tandem with depressing its share price. A significant change of strategy is being demanded by the markets & BP needs to deliver quickly or a predator will do it for them!

Https://www.reuters.com/business/energy/sp-lowers-bps-credit-outlook-stable-over-debt-levels-2024-06-03/

Https://www.reuters.com/business/energy/sp-lowers-bps-credit-outlook-stable-over-debt-levels-2024-06-03/

Firstly, don't pay any attention to the wrecking balls of the zombie troll! Unsubstantiated drivel adds nothing to the discussion!

The facts look to be:

1. Shell under Wael Sawan would not extend the deadline by 10 days, if there was no prospect of reaching a deal on Pensacola. I doubt whether there will be any further extensions - Shell will want this sorted.

2. Pensacola has been progressed by Shell as a project, because it satisfies stringent prospective profitability criteria, which have been applied rigorously across all Shell projects.

3. The additional 10-days has been allocated to hopefully finalise a solution as much of the necessary ground will have already been covered, probably multiple times.

4. Deltic will want to keep as high a percentage of Pensacola as they can, in negotiation with parties that want to take advantage of the now aggressive deadlines that have been scheduled, whilst mutually agreeing cost apportionment.

5. The organisations Deltic is negotiating with are unlikely to be satisfied with any agreement that leaves Deltic with a bigger share of Pensacola than them.

6. One end of the negotiations is Pensacola being handed back to Shell for no return - effectively a 100% Farm-Out of 30% of Pensacola for a nil return!. This is obviously not in the interests of Deltic, but it would reflect badly on the other parties to the negotiation of a share of Pensacola, as they would also expend a lot of effort for no return.

7. It is also in Shell's interest to prove that these partnerships work & also that the choice they make on partners is robust!

The clock is ticking as day 1 of 10 runs down!

Bloomberg states that there is OPEC+ outline agreement on another 2m bpd of cuts

But, it looks likes an additional 2m bpd has been agreed:

https://www.reuters.com/business/energy/opec-seen-prolonging-cuts-2024-into-2025-two-sources-say-2024-06-02/#:~:text=LONDON%2FDUBAI%2C%20June%202%20(,and%20rising%20rival%20U.S.%20production.

Reuters views on OPEC + meeting today, partially held over the Internet, but also with OPEC + members invited to a meeting in Saudi.

The importance of US production is emphasised, bearing in mind that a maximised production level of around 13m bpd is around 12-13% of World demand & has a significant impact on both supply and price. Does the US want low gas prices with an election looming - yes, it certainly does!

https://oilprice.com/Energy/Gas-Prices/US-Gasoline-Prices-Continue-to-Drop.html

Https://oilprice.com/Energy/Energy-General/Oil-Prices-Under-Pressure-Despite-Expectations-of-an-OPEC-Deal-Extension.html

MrP - unfortunately it looks like he is not joking - the same litany of drivel is cut and pasted across multiple threads. The confusion of his VIX readings analysis, indicates his tenuous grasp of the subject!

When he ventures out into very basic economics theories and views, he gets even more confused:

"Lowering interest rates is only going to do one thing, it’s going raise inflation numbers duh."

Reminiscent of a scalar in a sense - in that he has force but no direction!

Maybe there is a threat that Shell might stop drilling. Shell has a lot of NS commitments, but it may quite possibly be starting to unwind them with the current fiscal environment, and obviously imminently changing political scene. Maybe Swindells RNS was a genuine warning of difficulty finalising a deal, and the precipitous SP fall reflects the reality of the situation rather than corporate chicanery at play!

https://www.telegraph.co.uk/business/2024/05/29/shell-exxon-sell-390m-gas-fields-north-sea-exit/

Perhaps Bye! Bye to another political commitment to the UK Government as part of the agreement to domicile here from January 2023:

https://www.telegraph.co.uk/business/2024/05/29/shell-exxon-sell-390m-gas-fields-north-sea-exit/

Larry,

Some great views, particularly on compounding. One of my favourites on whether to sell shares is would I buy them today. if the answer is an emphatic NO I know whether to sell them!

This time I was very edgy about having sold Shell - I just think there are so many positives for them at the moment. Cometh the hour cometh the man & for me Wael Sawan will prove to be one to follow!

Many thanks Larry. it's good to be back. I really like Shell & the shares have been very kind to me, so I have to bear in mind that the shares do not know that I own them! I parked some of the funds in RELX, but it was only a brief flirtation - still on my radar though.

I burnt the Shell dividend this time, but I'm nicely ahead even after taking account of this & after having gifted the Exchequer four-figures in stamp duty. Ouch!

Just back from walking the Eden Way in Cumbria, around 70-miles, taking a week out with a bunch of old school buddies! I think the pain from my, softer than I thought, feet was even worse than watching the SP go up further after I bailed out of Shell. Oh! Well it's always gratifying to know that I don't just confine my misjudgements to shares!-

Should say Autumn/Winter Election!

After having NO intention of holding Shell shares through a prospective Autumn election, I bought back in this afternoon - it looks like just before Rishi announces a Summer Election! You couldn't write the script!