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The results were as expected.

One quarters results are irrelevant for where the company is.

I didn’t really hear anything in the commentary except that the main profitability driver is the upstream and trading to some extent.

A competitor will also have a trading team so is a quick synergy in a takeover.

Notice how the consumer business was basically brushed over. In itself is a nice to have - but that could be sold to a Walmart or Carrefour

I have been thinking further (a lunchtime pint in the pub on a Sunday is as good a time as any). The presentation needs to be bright forward to this week - really in line with the results.

The Q&A in the results presentation will just be Elliott questions anyway.

They can't pull a rabbit out of the hat in the results. This is the pil business - not pharma where you can announce a blockbuster drug.

The thing to focus on is the cash generation.

The accounting numbers can be misleading. I dont say inaccurate - I use misleading for a reason.

On the balance sheet they have a lot of bonds in the funds they manage. As long term rates have gone up, bond prices have gone down so the mark to market on those bonds have produced losses.

If interest rates remained unchanged - there would be no movement on the bond portfolio.

The bond portfolio, however, is held to match the liabilities in the pension funds they have acquired.

The bonds they hold in SURPLUS to liabilities can decline in value if rates go up. That is why they have affected the share price in the last 18 months with rising LONG TERM rates.

Again - rates steadying takes that away.

The mark to market is something to look through.

The company continues to increase the cash generation of the assets and schemes they acquire. The yield is safe and rising, generally, in line with inflation; A 10% yield that rises is not to be sniffed at.

Meoryou

in answer to

5) market has to start thinking about how it values BP against possible break up or takeover.

Previously a takeover of BP was seen as unthinkable for two reasons

1 Monopoly - the sheer number of countries you have to negotiate with

2 Sheer size of BP

On the first point - that could easily be solved by spinning off or selling any asset in a combined market with the acquirer.

On the second - sadly - BP is relatively a minnow. It is one 6th (SIXTH) the size of ExxonMobil. The latter could buy them with loose change. That would have been seen as ludicrous 5 years ago.

I don't like buying stock because they are undervalued --as you can get into a value trap. In this case - the market has plainly lost patience with the board.

It doesnt matter how big the stake is.

An activist investor has got involved showing a lack of patience with the current 'strategy' of the board.

Oil is a long-run business but there seems to be a different strategy every 18 months.

https://www.bp.com/en/global/corporate/what-we-do/our-strategy.html

I have a look at the 'Strategy' summary for BP. They are late to low carbon - I could go with Statkraft or Engie for that kind of thing.

The E&P business is declining and convenience doesnt move the needle. Indeed - they are one of the biggest sellers of coffee in the world (fact) but so what?!?

They are a muddle and not best-in-class in anything.

There is no happiness with the strategy. Compare the share price in the last 2 and 5 years with Shell and Chevron.

The market is voting with its cash.

I am bullish only on expectation of a breakup/takeover. I don't expect BP to exist in its current state or anything close in 2 years time. So the issue is who moves first - Total or Shell?

The news about Elliot. The stakes have got higher.

The presentation may well be brought forward to next week.

I think the presentation at the end of the month is critical for the company going forward.

Price is up so far this year but no great difference between them and Shell or Total.

Other than a positive view on the oil price, I still see no catalyst. Either hit a home run at the end of the month or put the business up for sale.

Ignore the Miliband bit - it has nothing to do with the BP case.

BP has been all over the place for years.

The important bit it is the sheer PROSPECT of a merger with Shell is being talked about. Go back 5 years and the idea would have been deemed ridiculous.

BP are living on borrowed time. The valuation discount to their peers is an insult - and it will be corrected. Either they break themselves up or someone else will. the board has no credibility.

I have an investment but on the basis of a takeover - nothing else

I dont think it makes a difference. Just indicates drift in the company. Company is cheap, though

I posted on here late last year questioning what the catalysts for this stock going up. I wasnt particulalry convinced about any of the points made.

the company IS cheap on valuation but the company is in a funk. No clear narrative and the messaging is crap.

Now we get the cost cutting through job cuts.

I have bought in the last week on the basis of them being taken over this year. I will be paid the divi to wait.

I see no other compelling reason to hold. Exxon is valued 6 (SIX) times more than them. They could buy BP with spare change.

We shall see

If BP was a book - you would have no idea what to make the title.

I can’t see institutions putting up with this. Down 25% relative to Shell over 5 years.35% relative to Chevron.

They aren’t a British champion as the North Sea has declined so who in government will bother to fight for them?

I think the breakup - by themselves or via a third party - will be the story of 2025.

Thong is - that is a collection of businesses.

Where is the compelling narrative?

Number 7 convenience retailer? Can’t I just buy Walmart?

Exxon unashamedly produces gas and oil products. So if you want exposure you go there or to chevron.

BP is sort of in renewables once you have worked out the JVs etc.

BP seems ashamed of its oil and gas - which is a bit of a problem when it is the most profitable art.

I think I am talking myself into the breakup story - but that is it.

Slacker,

I agree with what you say. The stock is cheap relative to its peers. But I cannot see a trigger to correct this as the strategy is so unclear.

The one thing that could work would be a takeover. Exxon is 6 times the size and could buy them with petty cash. Dump the petrol stations and the competition issues would go away.

Other than that am stumped as they can be ‘cheap’ for years. They don’t know what they are.

GGPLYR

I did not say it is a good thing - but it is something that was made quite clear when the RI was announced in June.

Maintaining the dividend amount was part of the capital raising. If you aren't happy - Simply sell and put your money elsewhere.

I was quite happy with the RI and am happy with the strategy of the business.

RoyGA

this is not true. The interim dividend payment in aggregate has been kept the same. The adjustment is because of the (7 for 24) rights issue in the summer. This was flagged at the time. Anyone who took up their rights will receive the same amount of cash.

I couldn’t read the full article but I agree with the headline. They are listless and if you had to quickly summarise what they are trying to do - you would find it difficult. What do they actually do better than the other majors?

There is a big problem with the BP investment case if you are looking for a takeover approach. There would be big competition issues - particularly in the downstream. I think it is a value trap. Looks ‘cheap’ but will stay there.

Regardless of what we think of the strategy - it would be good to HAVE a strategy - lot just a vibes-based strategy that changes every 18 months.

Just go all out oil and gas and promote it.

I concur Taverham. The share price has come off 4% in the last month (excluding the effect of going ex dividend) and rhe ten year gilt has come off a similar amount.

Can't say am worried about the company- market ebbs and flows.

Clued,

fair enough the trading statement is news, but we get that every 3 months and the business isn't really changing.

It is too big to be bought by a rival due to competition issues. Other than a breakup, which the board is not planning, I cant see anything.