Member Info for tedmak

Hi, James and HI
regarding HI's analysis vis a vis the forward curve, that is fair enough on cash distributions to shareholders.
On the discount to peers, I would flip it the other way.
The shareholders who held on the back of the pre-summer 2020 strategy will be migrating away, probably to Chevron which is being quite robust in its views of the future of O&G.
For the new shareholders BP wants, they already have access to Equinor or SSE, which are huge in the field BP is trying to get into.
So there are already choices out there and there is a while to wait to see if the strategy is properly delivered.
The dividend argument is a fair one, but with the volatility of the share price, that has less appeal.

All IMHO

I have posted before about BP.
I just don't agree with the magnitude of the strategy change.
They have set a big target for 2030 renewables that can only be hit by acquiring assets and developments from others - like the USA deal with Equinor last year.
They have good O&G assets that they are not developing and flogging off, eg in Oman.
They are slashing the reservoir engineering department. (That was concomitant with reduging the O&G) output. They have also stated that returns from O&G are 2% above
The only way to get to the target by acquisition is by overpaying.
See this tweet from today.

https://twitter.com/emilygosden/status/1359118359888080898?s=20

I think it is madness to go from an area of expertise to suddenly realising there is a climate crisis - in 2020.
The way to make money out of BP, imho, is by selling TO them.

Stocks are for investing. Religion is for beliefs.

Thanks, Nom

I concur.
The results showed that they would have got through last year without needing the placings that they issued.
The strategy and execution is working.
Have held for a number of years so, hopefully, this can be a catalyst.

They will be using it to us back the shares. As they are lowly rated, IHMO, is a good move.
The Indian business has been a good shareholding investment, but not one they control so not a bad move to liquidate it.
When you strip out the value of the Indian shareholding’s, the fund management business is valued at peanuts so the buybacks add vale.

I assume you mean no deal on the European assets, which would make some sense.
Can’t see how Brexit affects PHNX at all.

If you look at the December 2021 Brent price, it is at the level it was on 9th March.
The Calendar 2021 TTF gas price (the marker natural gas price for Europe) is 1 euro/MWh higher than it was on the same date.
JKM December 2021 is higher than it was on this date also.

The RDSB share price then was £13.
The share price is being held back by the institutional selling of investors that are drawn toward companies that are more focumes on the energy transition. RDSB still need to demonstrate this.
I have bought in at the current levels. I am quite happy to wait for the company to develop its ability to develop the renewables business and gas, in which RDSB is huge, is part of the solution going forward as it is a less carbon-intensive fuel and is necessary for developing hydrogen down the line. I also get the dividend whilst waiting for this to happen.
The share price should be north of £15, but it will require patience and there is no point getting frustrated if you want a quick spike.

Volume more than twice the daily and we are not at 10am yet. Hmmm

Reliable divided but also, they are the biggest UK utility in terms of renewables.
Definitely the biggest listed on the London Stock Exchange.
For exposure to this sector (renewables), other than investment trusts, this is the only viable option.

My take is that there is a rotation of the shareholder base.
Management has stated it is going in the direction of more renewables and de-emphasising Oil and gas. Thus there is less incentive for the former shareholders to hold and the company needs to convince new holder who believe in the renewable vision.
This will take time and is exacerbated by current market and oil pric weekends.
I have been buying from below 950p and am bid at 887. This. Is a medium term play and this old be a rough ride fo 6 months or so.
The oil price will firm as development spending and rig counts have been slashed.
(Whilst writing i have been hit at 887.)
This is a great buy in the medium term but tricky in the short term.

The JPM analysis.
I can get the big about successfully executing cost cutting.
I don’t get the disposal bit. I can’t see a wealth of buyers for NOrth Sea oil and gas production, nor ageing AGR nuclear reactors.

Pokerchips,
a good summary of the renewable situation.
I am looking to pick up RDSB between 950 and 900, which I reckon I will be able to do over the next fortnight,
The majors SHOULD be investing in the transition but it is bonkers to just walk away from the O&G business as BP are effectively doing.
What is not being addressed, particularly in Europe, is that there still be a demand for liquids and gas in 2050. If the European majors don't fund the development on new finds, then the field is left clear to the American majors, the 3 Chinese majors and the National Oil Companies. If we in Europe want to be in the grip of the rest of the world for a crucial resource, could not have adopted a better strategy.
For RDSB, I can see an increase in prices of oil and gas in the middle of the decade. For the first time in the last ten years, there has not been ONE Final Investment Decision on a LNG project. This is a long-term value play.

Has there been a broker upgrade?
Can’t see why this move didn’t happen yesterday.

That's a fair point about the wealth fund.
Still think being late the the renewable party (2020) is more bullish for the asset holders.

Why would the Norwegian fund buy BP shares when Norway already HAS Equinor?

This is an argument to buy Equinor, not BP. In summary, this is bullish for the companies that already HAVE the assets or have strong development positions.
Engie/Iberdrola/SSE for a start.

The BPs are playing catchup.

https://www.bp.com/en/global/corporate/news-and-insights/bp-magazine/bp-makes-first-move-into-offshore-wind.html

Today's deal, I sense, is the first of many.
The target for renewables by 2030 made M&A the only way to get there.
I am not sure if the price is value enhancing, but, and I have said this before, it looks to be a leap of faith that the company can do a lot of acquisitions in the next few years.
I would prefer it if they stayed with the E&P segment as that is the sector that they know.

The shares are currently trading at a premium to NAV.
The share offer is at a premium to N AV and will INCREASE the NAV per share.

It is good for existing shareholders.

https://www.eia.gov/todayinenergy/detail.php?id=44996

This is a very useful site.
There is little sign of a recovery for international travel which is where the RR engines XWB are biased towards.
I would wait for a turnup in this demand before buying.
The half year results also said there would be a cash drain until the middle of next year, so I can see capital raise.
Am looking to buy only after a capital raise. There is no chance of a bullish impulse before then, unless a vaccine is approved.
(I have no idea when the vaccine turns up).

I think part of the issue is that RR have got engines on the XWB aircraft.
That is the kind of aircraft that has been disproportinately hit.
There is short haul activity WITHIN Europe and WITHIN the US, for example, but the transatlantic routes or flights to South Africa or Australia have been slashed.
Trent 1000 is for the Dreamliner 787 and Trent XWB is for the A350.
Can you think of the next time you will be on one of those? I can envisage it next year, not this year, for myself.
They will have to finish off the engines that were being built, eating working capital, without the income from the flying hours on existing aircraft.
They are very operationally geared and the crisis has thrown this up.
I assume they will be loathe to let specialist staff go in case things turn up.

https://uk.investing.com/news/commodities-news/big-oils-patchy-deals-record-casts-shadow-over-green-makeover-2201330

The above is an interesting article. The majors are out of favour until they turn over the shareholder base to holders who are convinced about the transition measure.
BP's target for renewables by the end of the year can only be achieved by takeovers, so that will just be a premium paid from BP/Shell shareholders to SSE/Iberdrola/Engie. Great for the latter.
I notice on these pages that the only argument FOR seems to be that the oil price will rise. In that case, just by an oil ETF.
I read very little support for the strategy and that is the only way the share price can get ballast.