Member Info for getafgrip

LA &, Armani,

Shell & BP are not going to duck the speculation anytime soon. I really don't think that BP is going to survive independently for much longer. The possibility of Castrol falling out of British ownership, is a tragedy that I simply don't want to witness though! Sawan has not revealed his hand yet & I still think a takeover of BP would be a masterstroke for Shell: creation of a £200 billion company, 5% of world oil output, fill in gaps worldwide, a CEO that is at the top of his game, lots of opportunity to asset strip & do some wheeler-dealering. British Government likely to favour keeping BP in British hands, US majors distracted by digestion of recent acquisitions, lots of scope to reduce headcount, hitting BP at its most vulnerable, Horizon baggage in the final furlong.

Separately, I am well over 90% invested in oily shares, and at some point, although not very often, I tend to think more conventionally & the two of you have been shouting LGEN for a long time, as have others that I respect, with pretty well one voice. So, at close of play yesterday I have joined you as a shareholder with a view to building a decent size of holding, but short-term with a view to LGEN going Ex-d on the 21st August, interestingly a few days after Shell going Ex-d on the 15th August. If everything aligns there could be some great trading opportunities.

I think the OP will be supported by the prospect of the Orange-utan, making the Straits of Hormuz safer for shipping! I think he will like to see a few attack-boats obliterated!

If BP had not been manacled to a decade ,reflating the US Gulf States have-nots and economy single-handedly, fakers, and many "invisible" companies, to the tune of, is it, $65 billion dollars, so far, and had not pursued blindly and foolishly the green agenda, and trousers were kept on in the Boardroom, the BP world would look much different right now! But, in spite of all this they still have a disturbingly loyal and resilient shareholder base, and a base product that people buy!

Lending: I think your comment below is really pertinent at this juncture:

"Seems to me to be a case of two to one, half a dozen of another when looking at the fundamentals. With treasury shares the company maintains control over their finances, with cancellations they lose control."

Taking it further, if the shares held in Treasury are greater in number than what would be deemed necessary, to fund the BoD's largesse in terms of staff bonus and incentive obligations say. Why are they holding an "excess?"

Whilst the shares are held in Treasury, they are also not available to anyone else, but they are still issued shares. Often takeovers and mergers are decided on very fine margins of share ownership. In the event of M & A activity actually/eventually manifesting itself, shares held in Treasury are in the gift of the BoD, and can say be used to favour a particular favoured bidder etc. Also shares held by BP in Treasury are also out of reach of a predatory company, so that there can be a doubling of their impact.

Many companies use Treasury held shares as part of a multi-faceted defence strategy. I don't think you will agree, but I consider BP is in play, albeit slow and pedantic play! Well with a defence strategy designed by Murray Auchinloss, what can we expect!

Jezzoo - I think you meant the American War of Independence - before today ends we will all be reminded of how Trump the peacemaker won this war as well! He wasn't there, but this has no relevance!

If you read the RNS from Shell relating to a possible takeover of BP, it only indicates that Shell will not get involved in a hostile takeover in the next 6-months:

I still think an agreed takeover/merger is still in play between Shell and BP. It is a chance to create a £200 billion oil major, able to compete at the very top table after one of the biggest takeovers in history prospectively takes place. Shell issued an RNS recently stating ambiguously that they were not "actively" looking at a takeover of BP. All this actually states is only the fact that Shell will not get involved in a hostile takeover of BP for 6-months. Nothing else is off the table; BP can agree a friendly takeover with Shell, if another predator steps in Shell can then bid within the 6-months etc etc.

Larry,

Really great to hear from you and to know that you are keeping well. Yes, you are right what a wonderful world. The Orange-utan blinks and in come haphazard punitive tariffs, the US dollar sinks, he achieves what escapes UK politicians and the pound goes up, Shell and BP's dividends are paid at a disappointingly low level impacted by currency exchanges. Then he reverses some of the tariffs selectively and everyone changes partners in reverse!

He is a massive disruptor battling with China to remain the world's number one economy! With the great temporary peacemaker at work, how can the UK economy fail stumbling from one political disaster to another as Stargazer completely ignores his weeping Chancellor.

I must admit I still think an agreed takeover/merger is still in play between Shell and BP. It is a chance to create a £200 billion oil major, able to compete at the very top table after one of the biggest takeovers in history prospectively takes place. Shell issued an RNS recently stating ambiguously that they were not "actively" looking at a takeover of BP. All this actually states is only the fact that Shell will not get involved in a hostile takeover of BP for 6-months. Nothing else is off the table; BP can agree a friendly takeover with Shell, if another predator steps in Shell can then bid within the 6-months etc etc.

LA & Armani - LGEN is great advice - what a whopping dividend! I've not held shares in an insurer since Direct line, so I think I will be joining you as a shareholder in the not too distant future.

Blatant, legalised planned theft of shareholders funds! Chicanery that will not have crossed any current British financial rules and regulations, or boundaries!

Top publicly traded oil companies by number of employees:

https://companiesmarketcap.com/oil-gas/largest-oil-and-gas-companies-by-number-of-employees/https://companiesmarketcap.com/oil-gas/largest-oil-and-gas-companies-by-number-of-employees/

Look at and compare numbers at BP, Shell, Chevron, Total & Exxon in particular!

LA - Great to hear your views. You are dead right - this Orange-utan instead of swinging on tyres in his cage, swings the worlds stock markets! Like you I try to weigh things up in economic terms, competition, state of market, opportunity cost of capital, throw in a bit of why and what if psychology, timing, world events erc etc & when I get it wrong it is just tough, poor judgement on my part, and I make my umpteenth promise to learn from my mistakes & these days I think I learn from about 80% of them. But, with political intervention I can relax and watch markets collapse if necessary, what happens is often arbitrary, out of the blue, barmy and ill thought through, and there is nothing I could have done to change things dramatically! At least the Orange-utan has a better idea what this button does.

As energy drinks go, the Orange-utan is a very similar colour to lucozade & he must have it running through his veins, because for his age his energy level is unbelievable! Before breakfast he seems to manage to fly-around the Middle-East, hit out with tariffs, make a half-decent attempt at starting World War 3, impose a ceasefire - if Israel doesn't have advanced missiles and shells they cannot fire them at anyone! In a 24-hour timeframe Iran's nuclear ambitions have been obliterated in a bullseye strike, but a few hours later assessments indicate that little damage was done!

Good to hear you did well with LGEN, it was on my radar for quite a long time as well.

On balance Armani is being very sensible sitting on a high proportion of cash.

You are right, an incredibly sad sight. Hopes and dreams! Perini look like having to make serious survivability modifications to future vessels. Cutting the mast off really, cuts off many of the questions relating to the what, why and wherefores.

I look forward to catching up with you on other threads

LA and Larry,

Hope you are both keeping well and happy in these turbulent times. Compared with the often inane feeding frenzy of the BP board, this is just a sea of calm. I tend to relax & let Sawan do the worrying here. I don't think he has put a foot wrong so far, and the dash for gas looks to be timed brilliantly, consolidating Shell's pre-eminent position in the market-place. Above all fully recognising the necessity for building and securing resources of a reliable, robust, interim energy sources, before we all go green and drive vehicles that run on water, & embrace every magic moonbeam solution to the perpetual energy crisis that comes along!

Certainly awaiting seismic-type events at BP. Auchinloss is fully at least 2 x earth-years behind Shell, with a cliched strategy that has been parroted at him so often by his critics. Helge Lund BP's Chairman will be gone in a time measured in years it seems, the Strategy director responsible for the rudderless mess that BP became - gone & together with her job role , which was firmly linked to the sinking share price! Abolished altogether! Auchinloss, trying to sell off the family silver to paper over the cracks (Castrol +). Activist Investor stakes; something has to give, so still patiently waiting for something to happen, which it will!

The SP is rising into excellent trading territory, but with events in the Middle-East it has probably got a significant distance to go. Iran will realise, that they are not going to have home-produced nuclear weapons, but the learning process is going to be extremely painful!

In the meantime some nice consolation dividends arriving.

Here's to staying lucky!

Storms in the Med. at the moment Lazarus has more chance of being raised from the dead than the Bayesian from the sea bed!

The BP SP has for now settled around £3.60p, based on hugely complex algorithms, no doubt accounting for variations in SP, Market Capitalisation, NAV, Enterprise Value, ROCE, ROE & with some models 1000's of other inputs. But you can venture into the market on Monday and probably buy BP shares for around £3.60p.

BP needs capital right now. Literally nobody on this forum is suggesting cutting the currently unsustainable dividend, but it is a way of preserving capital outflow. But, say the BP Board decide to have a rights issue - they are certainly petrifyingly stupid enough to go down this route. So, say they go down this route - generally a company will give a discount to to get the rights issue away.

BP's SP is generally agreed to be on the "canvas" at the moment. So a rights issue might have to be at say a 10% or 20% discount to the prevailing SP. I would definitely buy as many rights issue shares as I could at prospectively below £3/share, in fact I would apply for additional shares if the issue was not fully taken up. Fantastic BP has gone down the rights issue route & raised capital successfully.

Then a big bête noir comes into consideration for a company Board capable of rational thought - what about the (opportunity) cost of that capital. Based on a discount of 20% the rights issue is offered at £3.60p - 20% or £0.72p = £2.88p. This is an absolute masterstroke for any genius wanting to hasten the demise of BP. Because in the meantime buy-backs are relentlessly being purchased in the market at around £3.60p!

Without going in to the reasoning behind buy-backs being an excellent use of capital & generally good idea. Sawan at Shell for instance is a strong advocate for them, but what does he know! Lending published a very good link for what Warren buffet's views are, but again what does he know!

https://www.cnbc.com/2018/08/31/warren-buffett-explains-the-enduring-power-of-stock-buybacks.html

R75 - as has been mentioned, the disparity in the issued shared figures released is just down to those held in Treasury, which although issued are really in temporary cold storage. They pay no dividend, and cannot carry a vote as long as they remain there unless cancelled or re-issued.

They have several purposes that have not been mentioned. BP is generally regarded as being under siege by prospective predators. Murray Auchinloss appears to have taken this on board, and what we are seeing is what we have become accustomed to, essentially a weak and feeble cliched defence strategy.

This will be multi-faceted, and a very straight forward part of this appears to be buying back as many shares as they can into Treasury. Although the shares are neutered, they remain under the control of BP. and are often use das part of a defence strategy. BP can re-issue or cancel them, but it can also in a takeover battle ensure that they are pledged to a preferred predator. Keeping the shares in Treasury has the double effect of BP keeping control of them, and also ensuring that they do not fall into the wrong hands, additionally it helps to streamline the capital base.

Murray has sold off some businesses already. Castrol is slated for sale by Goldman Sachs, but this may just have the impact of flushing out bids. All potential BP bidders will have extremely detailed plans relating to raising funds from the sale of surplus BP companies, synergies with their existing company portfolio, prized stand-alone assets like Castrol, pre-agreed sales of companies etc etc. Whether a potential predator is targeting ownership of Castrol, wanting to build it, or sell it on, they are currently looking at a forced sale by BP at a likely low price - BP needs the money. A sale to a competitor. Also future opportunity availability - Castrol may not be for sale again, so the opportunity cost of not bidding comes in to consideration.

Strategy and Sustainability chief Giulia Chierchia, the key architect of the group's ill-fated foray into renewables, will step down on June 1. Chierchia will leave BP and her role will be abolished, the company said in a statement accompanying its lower-than-expected first-quarter results. Well that was a useful Looney appointment then! Probably well-timed before the long drawn out sell-off of numerous renewables businesses, bought on a scatter-gun approach to strategy at the top of the demand curve, and hopefully soon to be sold at a loss of billions!

Make no mistake, Murray Auchinloss should, and would have gone with Helge Lund, but it would not have sent great messages to the market when the senior directors all walk the plank together. Effectively Helge Lund is a very well paid dead man walking until 2026, whilst Murray Auchinloss, with the market around him developing a coherent strategy for BP over best part of 2-years will be a dead man walking until the axe finally and deservedly falls.

Then in comes Dan Hager on the 2nd June 2025 (so BP strategy changes/reverses this Sunday night) as a Non-Executive Director, to help steady the ship, for a test period to assess his aptitude for the Chairman's position, or a ready replacement for the current CEO's untenable position!

BP are in a great position. Chasing renewables at the wrong time, not at scale, and not when the winners and losers were determined has been an abject failure. Without very quick changes, the level of dividends and buybacks is unsustainable, in spite of what some of the less numerate clowns on this board think. So part of the so-called strategy is to sell off what is immediately saleable. Crown Jewels like Castrol, a world-class, profitable, British Company, with a reputation developed over the last century. Does this have any resonance with the BP Board?

The future of BP certainly does not rest in Elliott, although it is currently the third biggest shareholder, it evidently holds around 5% of BP & it appears that much of this is in options. Unless Elliott dives in deeper it requires strategic alliances. At the moment it only influences 1 in 20 BP shares. Something to do with tails and dogs!

Apologies for the previous post which covers total shares in issue. In the 1st Quarter of 2025 512 million shares have been bought back - otherwise the gist of the message is unchanged!

DK - In the 1st Quarter from the official BP website the company bought back 15,785,972 (shares in issue at the end of the period in 000's). At this rate of buy-back purchases, multiply this by 4 x to get an approximation of the yearly figure for 2025 , if BP gets that far. Applying all of your analytical skills how do you consider that this has no impact on the share price whatsoever?

According to the House of Commons Library:

What constitutes a billion is a source of occasional confusion. In official UK statistics the term is now used to denote 1 thousand million – 1,000,000,000. Historically, however, in the UK the term billion meant 1 million million – 1,000,000,000,000 – but in the United States the term was used to refer to 1 thousand million. The US value had, however, become increasingly used in Britain and the Prime Minister, Harold Wilson confirmed in a written reply in 1974 that the meaning of “billion” would be thousand-million, in conformity with international usage.

Further delays - becoming more predictable than surprising!

MoY,

On the 20th September 2021 the FT quoted Wael Sawan:

“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Shell’s upstream director.

Selling off a very profitable asset, in The US's biggest oilfield, amidst a sea of merger & acquisition activity, when all the major players wanted to be in the Permian not out. Investors can swallow the lines to take drivel on reducing fossil fuel production, we got a great price etc. It seemed to shout at anyone with a strategic view that Shell was starting to remove overlaps and smooth competitive issues in preparation for a really big acquisition.

Shell's agreement with Equinor to split their North Sea assets and create a new entity 50:50 Norway/UK owned, is clearly to smooth issues over ownership of North Sea assets and enable a merger or acquisition without too much heavy-handed Government interference, in terms of competition, monopolies, local impact, refinery location, control of markets, etc etc.

This will burst a few bubbles, but the strategy relating to a mega-merger/acquisition is often developed over a period measured in years. Also, companies like Shell , Chevron Exxon etc do not wake up one day and think why not take over BP! What they do is develop a multi-directional, dynamic, constantly evolving strategy with a generally lengthy gestation period. The interest in BP has suddenly come into sharper focus, because the companies showing an interest have suddenly seen it $20-30 billion lower in price to their calculations of not so very long ago. Shell is in pole position because they are also UK domiciled - but with this clown-fest of a Government anything could happen in the next half-hour!

The thread even gives voice to views on the lines-to take of ,Shell are not interested in BP because they have stated that buybacks provide better value than acquisitions. My advice to them would be don't apply for any jobs that have strategy in the title!