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But because every day they seem to buy at the bottom of the range I assume they are genuinely buying back the shares because they believe it is a good investment vs trying to jack the price, which they could do if they wanted to.
If the buy backs are a sneaky method to raise the share price so that they can get bonuses, then as a shareholder I say "good luck to them."
II don’t think they need to raise finance, they have $34b in cash and are reducing net debt rapidly. They are one of very few companies that have issued perpetual bonds. Obviously, they want as cheap debt as possible, but their net debt should be around $30b by the end of this year. This is impressive given the level of capex spend. BP are currently a cash machine. Its not unrealistic to imagine net debt of mid to low twenties end of next year.
41,907,557 (LSE vol only) is less then they have bought this year, up to the 9th of Aug(Q2+Q3), it was 154,831,000 shares. On a large buying day they buy around 12,000,000 shares, but today it was 6,862,485, so I would guess around 1/10th - 1/15th of the shares traded on a day (all three exchanges), go back to BP. They must be the biggest buyer on the day.
I wonder how many shares are in the pool of actively traded. I guess around 1b-2b. Does anyone know ? What I am asking, "is there a point at which a shortage develops ?"
The buybacks will continue to the end of September, maybe all the way to the next results date. They have spent £100m so far.
So Q3, based on the current price of gas and oil will generate +-$2b operational cash over Q2. No GOM but increased capex. This means another $1.5b buyback, plus a debt reduction of $2b
which is an indictment on their 10% ROR
If you believe they are going to deliver more than 10% (Divi +SP growth) in the next 12 months, they should buy back their own shares.
If BP is going to deliver more than 10% (Divi + Growth in share price) this year, they are compounding (by a sizeable fraction) your return by buying back their own shares. Obviously, that grows over time, and it depends on if you have a 1 week or 1 year horizon. After 6 months - 1 year we start to see an effect.
Around 6-8 weeks of share price support. And all the time the number of shares very slowly drains from the market. It does feel a little like downside protection, and the company is buying an investment delivering more than their own internal ROR at a very cheap PE
Does this mean $80/b by the end of the summer ?
Q3 isn’t looking bad so far.
I believe he specifically mentioned the oil price was $50/b in their forecast, which is why I believe this was their budget done in Aug/Sep 2020. Either way, not the best CFO.
I think they have no choice as management but to do substantial buybacks of shares so as not to look incompetent.
It's a worst-case model produced in September 2020 during the hight of covid.
It’s really difficult to see how they could have a cashflow deficit in Q2 due to GOM payment considering they have cut back their capex by $12b p.a. vs 2018 when POO was similar and reduced their divi by $4.4b p.a. Just these two items are a cash increase of $4b per quarter.
I see 2022/2023 a good time for POG
I do believe I will be back. I sold in batches at various times.
I am out around 24p average sale price, had 3.5m shares. I am watching for certain things, but POG could be a buy if ........