Shell Share Discussion Threads

[shaggies_view] 18/1/2016 12:01

Shell needs BG more than BG needs Shell.
Deal will go through....

Shaggy

[shaggies_view] 18/1/2016 11:59

I think you will find that the penalty to RDS is closer to a $billion than $100 million. Then there is the psychology of walking away at the board level....

Shaggy

[w1ndjammer] 18/1/2016 11:58

BULL RUN STARTS HERE

WJ.

[zyzzyva] 18/1/2016 11:42

EI crazy if you are correct.

this was back in December when the oil price was 25% higher



Originally the deal looked like no-brainer. It would end the governance and scale problems for BG and give Shell access to its reserves, saving Europe’s largest oil company the huge capital costs of exploration in the Arctic, Canada and elsewhere.

The economics looked good with the oil price at the $60-a-barrel level and forecasts it would rise back to $70 by the time the deal – which awaited overseas approvals – was done.

That all turns out to be pie in the sky. The price of Brent crude has tanked and in Christmas Eve trading stood at $37.50, down 75 per cent on the price 18 months ago.

Then there is the dividend. Shell says that the accretive value of the BG deal means it will at the very least be able to hold the pay-out despite the problems in the wholesale market. Given, however, that all the calculations are based on oil returning to $60-a-barrel this is not a very bankable pledge.

The Shell-BG deal no longer makes economic, investor or industrial sense and should be rejected by long term investors. It is too important to let hedge funds and other latecomers on the share register decide.

[w1ndjammer] 18/1/2016 11:39

Zyzz

oh dear you think the GS note was written just for Shell...................

WJ.

[essentialinvestor] 18/1/2016 11:31

We were due some sort of bounce.


Zy, the vote will not be even close imv.

[zyzzyva] 18/1/2016 11:29

LOL!!! Goldman are advising BG!!! they want to sustain a view for just a few more days, that oil price could bounce back.

but there is no way its bouncing back to what they require to justify this deal. after 27th it doesnt matter anymore, and people will be thing $20-30 for the foreseeable future.

[w1ndjammer] 18/1/2016 11:24

HERE WE GO GREEN SHOOTS APPEARING.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$




bloomberg.com/news/articles/2016-01-15/goldman-sachs-sees-oil-bull-market-being-born-in-today-s-crash
Oil will turn into a new bull market before the year is out as the price rout shuts down sufficient production to erode the global glut, according to Goldman Sachs Group Inc.
The crash in U.S. oil futures -- which sank back below $30 a barrel on Friday to a new 12-year low -- will send the nation’s shale-oil boom spinning into reverse in the second half of the year, the bank said in a report. As U.S. production slumps by 575,000 barrels a day, global oil markets will tip from surplus to deficit, Goldman predicts.
“The key theme for 2016 will be real fundamental adjustments that can re-balance markets to create the birth of a new bull market, which we still see happening in late 2016,” analysts Jeff Currie and Damien Courvalin wrote.

The market will signal it’s ready to rally when the forward price curve, which currently shows a steep discount on immediate commodity supplies, starts to flatten out, the analysts said. The end of that discount would demonstrate that there’s enough demand to whittle down oil that’s piled up in storage tanks, they said.
“A flat curve near cash costs is historically the buy signal for passive investors and we believe the current bear market will end the same way,” Currie and Courvalin said. “Such a signal is what will shift us to being bullish commodities.”
Goldman, which has warned that the oil market might not re-balance unless prices fall to $20 a barrel, forcing production cuts among shale operators, said this remains a possibility. Still, the $20 scenario remains an outlier rather than their most-likely case, and would only be realized if oil storage space runs out. As that’s unlikely, the bank said it’s sticking with its forecast of $40 a barrel for the first half.

[zyzzyva] 18/1/2016 10:56

BG net debt was $9.58bn in Q3, up from $8.54bn in Q2. so BG burnt through more than $1bn of cash in Q3 alone. it could be even worse in Q4 as oil and gas prices have continued to fall.

so is BG with nearly $10bn net debt, growing by $4bn a year at current energy prices?

[badtime] 18/1/2016 10:49

EI..I missed that dip this morning...so it's sitting on hands time

[zyzzyva] 18/1/2016 10:15

imo shell could buy BG for less than £4 in a years time

[w1ndjammer] 18/1/2016 10:05

Zyzz

take out a big short on BG. then end of..............

WJ.

[essentialinvestor] 18/1/2016 10:04

Added a few on the dip, unfortunately not quick enough this morning
to get any in the 1330's.

[zyzzyva] 18/1/2016 10:02

BG Q4 trading on wednesday - last trading news before the EGMs. and imo that news is going to be grim. BG has $10bn net debt and was bleeding cash in Q3. imo Q4 could be worse given the falling oil and gas prices.

[zyzzyva] 18/1/2016 09:59

BG is a highly leveraged, high risk E&P company while shell has enormous low risk downstream operations and relatively modest net debt levels. the 383p cash component represents 39% of the current implied BG equity valuation, which is very significant.

if the deal was called off, my guess is that BG shares could crash to £2.50 while shell shares could jump 15-20% or perhaps more

[w1ndjammer] 18/1/2016 09:51

monty

you are showing yourself up as not doing any research

if Shell walk they pay BG. 750 mill plus fees

still peanuts, but the likes of BP. are ready to pounce

WJ.

[manonph] 18/1/2016 09:31

Oman to cut 5-10pct oil output. Is this the start?

[montyhedge] 18/1/2016 09:29

ShaggieOf course they can walk away, lose £106m in fees, peanuts.CEO falls on his sword, that's why his pushing for this deal.He would have to resign.

[imperial3] 18/1/2016 09:22

You are kidding at these low oil and gas prices.

[shaggies_view] 18/1/2016 09:11

Monty - Shell cannot walk away in my opinion. 12 months is a long time, just look back at where the oil price was 12 months ago. As soon as Shell walk, BG share price tanks and in come the other IOCs and Shell lose! This is big balls territory and Ben needs them right now....

Shaggy

[shaggies_view] 18/1/2016 09:09

Iran is already factored in to a large degree. So many bearish posts indicate that oil is a BUY at this time.

How many saw sub $50/bbl when oil price was at $100+/bbl ? The same as those that see an oil price at above $70/bbl in the next 12-24 months I expect i.e not many.

Keep scaling in is my take below $30/bbl for Shell as their downstream margins should be very good .....

RBS lol - sell everything at $30/bbl. Shame they did not say this 2 years ago at $100+/bbl. Genius's

[montyhedge] 18/1/2016 09:04

Vote NO come back in 12 months time and rebid at 600p.BG shareholders would still take that.

[montyhedge] 18/1/2016 08:51

All in the price, no surprise Iran. That's why I think $28 is the low, then bounce as shorts close positions.

[84stewart] 18/1/2016 08:21

Not the massive sell off in oils some people expected quite the reverse

[montyhedge] 18/1/2016 08:18

The weak £ is helping Shell and shareholders, heading for a bigger dividend.