Member Info for Sekforde

Meory. I do not think paying $8 bn tax every year would be acceptable after all our effort and cleverness. The first month's dividend could be spent on acquiring a couple of modest villas in Monaco where we would reside for 6 months of the year. That would deal with the tax issue. The second month's dividend could be spent on lobbying MPs to bring forward a private members bill to reduce our personal tax rate in the event we return to the UK. We could suggest say a $1b out of the $24bn. It is after all better than zero and should command widespread support as an act of patriotism and philanthropy. After all, the windfall tax was only going to be $2 bn in total and here we are offering a $1bn ever year. The 10 million shares purchased on Friday is the normal spend to achieve around £2.5 bn in a quarter. So we are well on course.

Meory. I do not think paying $8 bn tax every year would be acceptable after all our effort and cleverness. The first month's dividend could be spent on acquiring a couple of modest villas in Monaco where we would reside for 6 months of the year. That would deal with the tax issue. The second month's dividend could be spent on lobbying MPs to bring forward a private members bill to reduce our personal tax rate in the event we return to the UK. We could suggest say a $1b out of the $24bn. It is after all better than zero and should command widespread support as an act of patriotism and philanthropy. After all, the windfall tax was only going to be $2 bn in total and here are offering a $1bn ever year. The 10 million shares purchased on Friday is the normal spend to achieve around £2.5 bn in a quarter. So we are well on course.

I think I will set the dividend at around $24 bn a year paid monthly to help with my cash flow. That should be easily affordable taking into account the savings on debt repayments and the withdrawal of the share purchase programme and my receiving a reasonable share of the renewable profits. Of course I am open to sharing if any one else intends to keep a single share?

I think it is more likely that oil price go higher than lower over time. At $100 a barrel it is far lower than it was in 1974 or 1979 in real terms. In 1979 oil reached $39 a barrel. The world's reserves are being depleted and there is no appetite for large new investments. The market seems to assign no value at all to the renewable business. But Bp says it will make S10 bn a year in 2030. If you were valuing property, 10 bn a year capitalised to a perpetuity at 5% is $200 bn - deferred 8 years at 5% compound gives a net present value of about $130 bn for the renewable business. There will of course need to be investment to reach that level of income. But the investment is being funded without affecting dividends or share buy backs. And then the debt is being paid off at such a rate that BP will be debt fee by mid 2024 and then there will about an extra $10 bn a year to distribute or invest. So all looking very good given a market cap of just over $100bn. And by the way if we continue the present level of share purchases (£2.5 bn a quarter) and the price does not rise there will only be one share left in 2032. I hope to have held on to it.

Clued you had it easy. I was brought up in a shed with no roof and no heating at all. To keep warm we wore sheep skins all day and had to run up and down the stairs every five minutes.

So again about 0.1% of share capital taken out in a day. Huge.

On each of the last two trading days BP has purchased back almost 0.1% of its entire share capital. If maintained over 10 days that would be 1%. I'll take that.

Once that $200M a month used to pay down debt is no longer needed (November 2022) then the money ought to be paid to share holders. This sum plus the $200 a year dividend already being paid plus the financing costs saved (say $200 bn) means dividends and share buy backs should total around $2.8bn a year. I make that a yield of about 50%. I do not like hedging. It was forced on the company by its lenders who will be no more. So this forecast yield is very conservative IF prices remain at this level and the practice of hedging is reduced or eliminated.

The company will obtain authorisation to buy back shares this morning. The best possible use of all this spare cash.

The debt has come down by $200M in a month. I was expecting more as the debt decreased by $400M in January and February and in March oil/gas prices were much higher. But the true position is much better. The cash reserves seem to have increased by $400M since year end as the total cash and draw down facilities have increased from $1.6 bn to $2.0 bn. I assume the facilities would not have increased as Hbr has no need for greater facilities. So this is just a timing issue. The cash has not yet been used to pay off debt.

But Wednesday approaches. We will know how much debt has been repaid in March and April. If HBR can repay debt at the rate of $200 per month then it sure as heck is worth more than $5.3 bn. Interesting times.

I am a simple fellow. I like old fashioned things like PE ratios and net assets. LLoyds is on a forward PE of less than 6 and its net assets per share are around 57p. And I am massive fan of buybacks and LLoyds is executing £2bn on a market cap of around £30 bn. I am not really worried by inflation unless it leads to a huge increase in interest rates and defaults on mortgages. But long term interest rates are low and there remains a labour shortage and the mortgage default rate is at historically low levels. So it seemed a good idea to pile in at just over 45.5p. A sort of BP all over again. And now there is red all over my screen. But BP is on fire and I cannot close any of those positions until we see at least £6. I do not like to trade. It is a mugs game jumping in and out giving away the spread every time you do it. And no graph can give the slightest clue to the future IMO.

Laidback

The reduction in debt looks good and it is being done on the back of all the nervous nellie hedging. If Harbour had not fallen for that trap we would be doing much better. However worth assessing profits in 2024 when the hedging is nearly over and the debt repaid. Laidlaw you are good on numbers. Assume Brent at $112. And get cracking.

Very good post Laidback.

The buybacks were 903,004 on 3rd May and 2,824,987 on 5th May. This is of course well short of the number they will need to be doing to knock out £2Bn of shares over three months. Annoyed with myself for venturing into LLoyds. I was attracted by the high yield and buybacks. Thought I could replicate my performance. But there is much less transparency than BP. Bought 4 tranches at 3000 a point with IG. All showing large losses. Stupid. Painful.

Yes you are right. I missed the one on the 5th.

Thanks Meoryou. And to be accurate Charlie 156 I simply said there had been no purchases in the last two trading days. There were a few the day before at around £4 before the sp increase prevented more under the rules to which M referred. Given the surge today I think the embargo must continue into next week.

The absence of buybacks over the last two trading days is a function of the price having risen 5% above the average over the last 5 trading days. The mandate does not permit purchases in those circumstances. The result is there a stacking up of the promised £2 bn over the remaining 58 trading days until the next quarter's results. If the price is stable today the purchases will begin in earnest next week.

Well the £ is lower and the oil price in dollars is even higher. Rosneft is unimportant now. $1bn a year was chump change any way. Has produced a large loss which should reduce the tax burden.