Member Info for getafgrip

MOY - I think they must still have a room at each HQ dedicated to Shell & BP merger discussions, which probably even predate what Lord John Browne stated on regrets in his autobiography. As you know his final chapter was a UK court lifting an injunction on publishing revelations about his private life - how the past has come back to haunt BP!

MOY - I think they must still have a room at each HQ dedicated to Shell & BP merger discussions, which probably even predate what Lord John Browne stated on regrets in his autobiography. As you know his final chapter was a UK court lifting an injunction on publishing revelations about his private life - how the past has come back to haunt BP!

DP - I think this is just ruthless management of the FO process. I am disappointed, but quite understand people opting out as investors as there is a lot of traumatic history here. To an extent they are collateral damage to the objectives and strategy behind the RNS. As with Sir John Harvey Jones view: was that business is about slaying your favourite children!

I really don't hold the view that Graham Swindells cannot construct an agreed deal. The only stumbling block is the price & maybe prominence of the FO partner - Dana was an inspired choice if something similar can be replicated. The RNS was for me intended to focus the minds of the negotiators, remind them that they are in a competitive situation, reinforce the fact that Deltic is in live negotiations with several other parties, and that the opportunity to share in part of 30% of Pensacola is time-limited expiring for them in a little over 3-weeks.

I don't think handing back the rights to 30% of Pensacola to Shell and One-Dyas is a particularly realistic threat from Deltic. If it is what is the point in what they do as a company!

Do Shell really want a share of the 30% that the RNS states might revert to them? Essentially this would break the business model, throw Shell partnerships into disarray etc, and alienate Deltic from dealing with them when they are about to be up to their necks in Selene together!

If anyone wants a share of Pensacola, they have 23-days to come up with a realistic offer or the coach will turn into a pumpkin! It seems highly unlikely that if the 30% reverted to being owned by Shell & One-Dyas, that they would then seek a replacement partner! When Pensacola is gone it has gone! A golden opportunity for GS to demonstrate his corporate finance skills & for me that is what he is doing! Hopefully!

Another day SP slightly up, OP down. Either, this reflects the pressing possibility of "peace" in the Middle-East and the rerating of Shell approaching Ex-D on the 16th May, or alternatively I have landed on the wrong planet and speak the wrong language! Time will no doubt tell!

I would go for the BoD falling on their swords, or forming an orderly queue at the roof jumping-off point, if the FO has failed once deadline day is reached, or it is agreed on very bad terms for Deltic.

My view is that these negotiations are going down to the wire. Graham Swindells is a tough negotiator - look at the Selene deal. At least give the BoD the opportunity to complete the negotiations otherwise the tea lady (person) will find themseves in charge of them!

I agree, quite a serious and somewhat overdue rerating of the Shell SP. Although we can get a positive rerating, common sense tells me that this will have a limit, due to the serious size of Shell - the SP is not going to double overnight. So, I keep thinking the SP is a bit toppy, together with £30 is bit of a barrier to upward progression for now.

Bailing out at £28.33p was a bit early, but in the final analysis it was pure Fear Of Missing Out. You are never wrong to take a gain. I look to have burnt this dividend, but then we will be into more interesting buying back territory hopefully.

The BP results indicating that it is weak & getting weaker, squandering capital, increasing debt whilst carrying on with buy-backs, seem to make it very vulnerable. Market reception of the results seems to strongly indicate that either a robust change of strategy & direction is necessary, or it will be taken over.

Wael Sawan will not necessarily go down in economic history books as the CEO who did a lot of buybacks, but he will if he takes over/merges with BP - it must be something he is considering!

Yes, today the SP is up whilst the OP is down - it is not unusual over the last 2-3 months. Personally I have been finding the oil market (& the market generally) a bit counter-intuitive, lacking logic or simply irrational. Of course it might just be me!

An extensive barrage of missiles and drones launched at Israel (with a multi-national response), retaliatory strikes from Israel, & the oil-market pretty well ignored any prospect of escalation of war in the Middle-East. Similarly with attacks on shipping in the straits of Hormuz, even with US, UK responses etc. All very weird.

One of the biggest suppressants of the OP for me has been the US Election getting nearer on the Horizon. Biden very obviously wants gas prices as low as possible & is trying everything to insure this! You name it, playing around with the SPR, pressurising refinery costs, calling in favours from Middle-Eastern producers, maximising the Permian output so that the US has become the biggest oil producer in the world, then using its swing producer status in an attempt to "control" or at least calm the oil market. Stubborn inflation leading to slower interest rate cuts.

Russian, Iranian, and Venezuelan tanker fleets going "dark" at sea. Switching cargo from one ship to another at sea, changing ownership, turning off identification signals in mid-journey etc. Although adding massively to the costs, actually selling the oil on at steep discounts, therefore suppressing the price.

Maybe the OP is too "falsely" low relatively at the moment, but it seems likely to me that it will converge with the SP again, because the Shell SP is so intrinsically linked to the prevailing raw material input price of crude oil and gas. My view is still that the gap will close, when some kind of normality returns after the US Election.

Sorry, should read "biggest Gas and Oil discovery in the NS in the last decade."

Literally up to the point of the ink drying on a Pensacola FO agreement, the CEO can state completely honestly, misleading nobody, that it is a difficult financial market and nothing is certain in the SNS.

Realistically though, will Deltic be handing back 30% of the rights to the biggest Gas and Oil discovery in the NS for nothing. Will nobody even bid £1 for them - let's face it for a better than evens chance of a return measured in the hundreds of millions of USD. When the Government is in the process of opening up the NS again, and business is already starting to gain serious traction!

Deltic will exhaustively evaluate the new licences & yes there is a possibility of handing them back, as there always is, if they do not meet the necessary criteria. But they will be doing this anyway - not because Deltic no longer see the new licences as viable, before they are even scrutinised & fully evaluated for their commercial potential.

Will Shell as a major JV partner, wanting to keep to its agreements with the UK Government on the NS, and currently on track to hit profits for the year of around $30b USD, not be able to exert some financial leverage that ensures the continuing success of the Deltic partnership on Selene and Pensacola & prospective future projects. Is Deltic an exploration company or not - the RNS alludes to Deltic running away at any hint of success - is that likely!

Do people really think that 30% of the potential success of Pensacola, along with valuable new NS licences are going to be relinquished by Deltic without realising any value whatsoever?

My take on it is that once a dividend has been paid, "Elvis has effectively left the building," probably singing "will you miss me when I am gone!" Certainly the capital & opportunity cost of it has gone. Yield is important though & has to be kept competitive with peers, and compensate to compensate for the oily, distasteful, anti-social risks of holding say Shell or BP shares - "Dirty Business" by Peter Pringle on the dynamics of the similarly vilified tobacco industry is good on this.

If a company buys back shares, when the shares are clearly undervalued (as MOY says), this is a sensible use of capital, if a better safe return cannot be identified elsewhere. Cancelled in Treasury, the buy-backs save the company on payment of a dividend, not just that year, or for the next quarter century, but in perpetuity- quite a saving if done at scale!

The reality is that once the buy-back takes place, less shares own more of the company & this should support or increase the share price! Buy-backs also tidy up & streamline the capital ratios of the company, say if it is gearing up for a takeover. They increase the EPS & ROCE ratios etc, which the financial world tends to applaud!

If you hold the view that Oil & Gas markets will decline over time - not necessarily tomorrow morning, but over say the next decade or 25-years. I see them as helping to mitigate/manage that inevitable incremental decline.

A few requests from disillusioned shareholders, e-mailed to Deltic, has a chance of achieving anything meaningful that hovers around zero. Deltic will not be involved in delicate negotiations with regard to the FO of Pensacola one minute, and then give away the essentials of its negotiating stance to a few disgruntled shareholders the next!

This is not going to happen! It is the application of their business strategy, priorities and objectives, in a complex, pressurised & highly competitive market-place. Otherwise they would be in danger of involving themselves in "a camel is a horse designed by a committee" scenario!

May will probably see the objectives of the RNS become clearer, but I don't think Deltic will reach a point at any time/soon where they can give shareholders a detailed explanation of the rationale, true objectives and true motivations behind the RNS!

Right now a predator company wanting to partner with Shell in the North Sea, can make an approach based on the Deltic Market Capitalisation of only around £18m, and share in 2 x proven oilfields in Pensacola and Selene. Plus Syros and other prospects in the pipeline plus new licences.

In terms of Enterprise Value Deltic is extremely vulnerable right now!

1. Investors are obviously concerned due to Deltic's history etc.

2. Pensacola is still the biggest North Sea find in a decade.

3. Deltic owns 30%, Shell 65% & One-Dyas 5% - will Deltic give away this share? The answer is no!

4. Shell may well be concerned about the PR aspects of how they deal with partners.

5. Graham Swindells is under an obligation to communicate major dynamics of the business operations to shareholders, particularly when they could have a significant impact on the share price - and he has done this!

6. Has he released the information indicating that no deal is likely in terms of the FO of Pensacola? Has he done this with the full knowledge that it would be very harmful for his FO negotiating stance! NO! He has highlighted the risk associated with a NO DEAL scenario!

7. Do Shell want to develop their very successful partnership with Deltic further? It seems very likely they do!

8. Shell has announced that it will be actively considering a New York listing to give true value to its shares, if things do not work better with an LSE listing. They will obviously not be content with the EPL and Regulatory environment in the UK! Could Shell have persuaded Deltic to raise the critical issue of the EPL starving the North Sea players of capital to the extent of derailing their involvement in the North Sea? Raising this issue has massive importance for all North Sea operators and prospective operators!

9. Deltic may well have a Farm Out agreement in place, but not technically signed yet! If not they have failed catastrophically, but I think the current situation is simply extreme brinkmanship in the negotiations!

10. There may also be something missing, or that has come to light to prevent the commercial exploitation of Pensacola, but this seems unlikely given Shell going ahead with the lead on the project!

Think about it! In essence there are only two outcomes from Graham Swindell's announcement! One is uncertainty of the successful FO causing the SP to fall off a cliff & two is the platform provided for GS to launch a blistering attack on the EPL and Regulatory environment, undermining Tory & prospectively Labour policies in this area, as we head for an Election!

From the BP website:

He has a degree in commerce from the University of Calgary, Canada, and qualified as a chartered financial analyst at the University of West Virginia, US.

Generally the negotiations will always be shrouded in secrecy, very sensitive, commercial in confidence, intensely competitive, and keeping various competitors separately in the dark until there is a decision and announcement. Some companies will ensure there are robust non-disclosure arrangements in place before they will even enter negotiations in the first place. So its a bit like the progress with negotiations is the Elephant in the Room - everyone knows its there but nothing can be said about it for the time being.

Worth a look if you have missed this superb corporate presentation from Deltic's website:

https://delticenergy.com/wp-content/uploads/2024/04/Corporate-Presentation_Apr2024.pdf

WP - Blood and Oil is excellent. MOY The World for Sale will be read soon, but it has not happened yet!

Interesting thoughts Boyo. I am trying not to make my assumptions & targets particularly timebound this time, but I find it very difficult. Shell go Ex-Dividend on the 16th May, when I will be walking in Cumbria trying to pick up a phone signal no doubt! Obviously, if you buy back by then you qualify for the dividend, which as you say is a nice bonus. We are stuck with the Stamp Duty, which is roughly half the dividend on a similar level of purchase.

I am working on £28, as the high reached on the 18th October 2023, as being a rational view of where we should be now, without the conflict hype & spike above £29, which appears not to be sustainable without significant escalation in the Middle-East. Market reaction to Middle-East events seems to be almost spookily subdued at the moment. £27 or even £26 do look like realistic dips, but whether they will appear on the horizon before the 16th May remains to be seen. I really see this as negative bet territory, hoping for the share price to go down by a certain time, very weird. Ride the wave & good luck.

Boyo,

Good morning - the chart says it all really & it is interesting to note that you are largely out of Shell at the moment. Shell does seem to have reached a bit of a plateau, after a really strong run, but all runs run out of steam at some point!

I was looking at waiting to hear the announcement of the First Quarter results on the 2nd May, but wasn't sure how the market would take the Shell statement on Gas "Trading & Optimisation results are expected to be strong, but significantly lower than an exceptional Q4’23." Particularly when the shares are already relatively high anyway.

The Sword of Damocles is hanging over the upward travel of the OP at the moment which looks to be based on the extent and severity of the Israeli response to Iran. Surrounded by enemies that have sworn its destruction Israel has absolutely no choice other than to respond aggressively. The US already distancing itself from any response, may leave a strong likelihood that Iranian nuclear facilities may be targeted. Its a worrying World we live in.

When as one example, Biden apparently wants Ukraine to ease up on Russian refinery attacks due to the sensitivity of gas prices in an election year, there are not just an awful lot of Geopolitical influences on the Oil markets, but Geo-Economic & political influences.

Cheers Larry - I completely agree. Sold at £28.33p & well ahead since I had last sold. This time sold partly due to fear of losing the "conflict" premium balanced with confidence that £28 is a good SP. Judgementally, my timing could have been better, but looking back certainly a block of 6000 were bought at £8.92p on the 27th October 2020, although there have been quite a number of buys and sells since then. I will most likely buy back in, but intend not to do so particularly quickly. I was sorely tempted to wait for the SP movement when Israel inevitably hits back at the Iranians.