BG Group Share Discussion Threads

[careful] 06/2/2016 11:48

Every time I hear an investment success story a little bit of me dies.

[careful] 05/2/2016 09:17

who dares wins Rodney.

[raffie74] 04/2/2016 15:21

The new purchased Shell B shares will be held in my existing Corporate ISA account. I would guess my lump sum would buy another 1000 shares, my instinct is to put the lump sum into 2 year fixed ISA etc.

[careful] 04/2/2016 14:29

Depends on the size of your holding compared to cash and other investments.
i am taking the shares + cash offer and already have a decent holding of shell.

if your numbers are modest, then what the hell, put the lot on RDSB.
a 8% divi is a good income.

[84stewart] 04/2/2016 14:22

shares+lump sum

[raffie74] 04/2/2016 14:19

I have been offered both Shell B shares plus a lump sum. I can either take the lump sum, or use the money to buy further Shell B shares, or buy Centrica or National Grid shares.

Any suggestions what to do ?

[spob] 04/2/2016 14:00

Oil major ConocoPhillips takes axe to dividend

FT

ConocoPhillips has become the first major US oil company to take the axe to its dividend, as it looks to conserve cash in face of the relentless rout in global crude prices.

The company on Thursday cut its quarterly dividend by two thirds – from 74 cents a share to 25 cents – while announcing a further squeeze in its capital expenditure plans for 2016. It now expects to spend $6.4bn, down from a planned $7.7bn.

ConocoPhillips shares tumbled 4.3 per cent on the news in pre-market trading.

Ryan Lance, chairman and chief executive officer, said:

While we don’t know how far commodity prices will fall, or the duration of the downturn, we believe it’s prudent to plan for lower prices for a longer period of time. The actions we have announced will improve net cash flow by $4.4 billion in 2016.

The decision to reduce the dividend was a difficult one. The dividend has been, and will continue to be, a top priority. We still intend to provide a competitive dividend, while significantly lowering the breakeven price for the company and substantially reducing the level of borrowing in 2016. Our actions also position us to deliver strong absolute and relative performance as prices recover.

Shares in the big US oil companies have come under pressure in the run-up to the fourth quarter earnings season amid fears that they would cut their dividends.

And while smaller energy companies – such as Kinder Morgan – has cut payout, Big Oil has largely resisted such a move, preferring instead to cut investments, jobs, sell assets or borrow to cover dividend payments

Just this week Exxon Mobil and BP have both vowed to protect their payout policy despite oil prices having falling more than 70 per cent from their mid-2014 highs.

The dividend move by ConocoPhillips comes as the company reported a net loss of $3.45bn for the last three months of last year. The loss included $2.7bn charge for asset writedowns.

Sales tumbled 42 per cent to $11.8bn for the quarter.

Having said just three months ago that it expects production to grow in 2016 through a ramp up of oil sands production in Canada and startup projects in Alaska, ConocoPhillips said on Thursday that it now expects production to be “essentially flat” this year.

Earlier this week, Standard & Poor’s ConocoPhillips on watch for a possible downgrade within 90 days. S&P said this would depend on the company’s ability to achieve cost savings and asset sales, and to cut capital spending without hurting production rates.

[stevenrevell] 04/2/2016 12:26

Can enyone advise me in new to this I have a small amount ov BG shares and want more shell to hold long term can anyone tell me witch to buy BG or shell at the moment ta

[84stewart] 03/2/2016 08:16

Keep ur shares

[pvee] 02/2/2016 21:31

Like many other contributors on this thread I'm a BG holder. On reflection the default option gives you both cash and a bet in the rise in oil prices in the future(medium/long term). In my opinion it all depends whether ou need the cash now or later

[jammyjambo] 02/2/2016 17:32

I own BG Group shares and have to make the decision of what to do with them.
I'm no pro investor which may explain my confusion. But why would I not just sell my shares now which are approx 1015 each rather than take the offer next week of 383p per share + [0.4454 * (RDSB - divs)?
Or am I missing the point? Is the 383 on top of the share price on the day of the decision?
Thanks, James

[stevenrevell] 02/2/2016 08:19

Divi unchanged

[topdoc] 01/2/2016 23:17

Anybody holding spreadbet positions in BG

[enturner] 01/2/2016 22:26

Thanks Bench. Good to know specifics.

[bench2] 01/2/2016 15:13

I have just spoken to BG IR dept ( Mark Liddiard ) . The mix and match prices were fixed on 18 Dec , 1463.5p for RDSA and 1469.0p for RDSB . Re Shell Q4 div , assuming the deal is passed on time eg 15 Feb , then new holders entitled to the Shell Q4 div of 47c as record date is 19 Feb . If a delay BG holders will get a final div from BG of circa 14c ps . I hope this helps . Obviously the circa 33p from Shell much more attractive .

[spob] 30/1/2016 12:52

January 29, 2016

Questions swirl around Royal Dutch Shell’s dividend

Christopher Adams, Energy Editor

FT


With BG takeover, futures are pricing in a cut to the group’s payout amid oil price rout
A totem sign stands illuminated outside a Royal Dutch Shell Plc gas station as light trails are left by moving traffic in this long exposure photograph in Romford, U.K., on Wednesday, Jan. 20, 2016.

Royal Dutch Shell Plc, which is buying BG Group Plc in the industry's largest deal in a decade, expects fourth-quarter profit to drop at least 42 percent after the rout in crude prices deepened. Photographer: Chris Ratcliffe/Bloomberg©Bloomberg

Investors mispriced at least one risk in the recent market turmoil: the likelihood that Royal Dutch Shell’s £36bn offer for UK oil and gas producer BG Group would collapse.
Even as it became clear that shareholders in the two companies would vote for the deal, as they did this week despite the plunge in oil prices, anyone inclined to bank an attractive 5 per cent return could do so simply by buying BG shares.


More
ON THIS TOPIC
Shell shareholders vote for BG takeover
BG’s overseas assets shine amid oil gloom
Lex Shell — the song remains the same
Fast FT Shell set for 40% slide in Q4 profits
IN OIL & GAS
Chevron vows further steep cuts
JKX board toppled by Russian investor
Baker Hughes warns of oil industry slump
Oil slump forces Repsol into deeper cuts
Sign up now


For months BG’s shares traded well below Shell’s offer value, and that discount has since narrowed. But that does not mean the takeover of BG, the biggest energy deal in more than a decade, is without risk for Shell. Far from it.

The acquisition, due to be completed on February 15, will end nearly 20 years of independence for an asset-rich producer and nimble natural gas trader that was spun out of the old British Gas in 1997.

Shell’s reserves will grow by 25 per cent to 17bn barrels of oil equivalent, including substantial deepwater crude output in Brazil and liquefied natural gas production in Australia. But it is taking on substantial capital spending commitments, including investment in BG’s asset portfolio, and thousands of employees. Issuing shares to fund its cash-and-paper bid will add to Shell’s dividend costs. All this just as the crude price has crashed to its lowest level in 12 years, hitting revenues and profits.

There will be savings. Some 2,800 jobs will be lost as a result of the takeover, $30bn of assets will be sold, and capital spending at the combined group slashed. These steps are designed to shore up cash flow and keep Shell’s promise to shareholders to at least maintain last year’s dividend — of $1.88 per share — in 2016.
The question is whether, and for how long, the Anglo-Dutch oil giant can sustain this payout.

Oil majors’ shares have long been valued for their reliable income streams: Shell has not cut its dividend for many decades. But exchange-traded dividend futures are pricing in about a 17 per cent cut to Shell’s payout this year, and steeper reductions, of more than 40 per cent, for 2017 and 2018.

Indeed, with Brent crude trading this week at just over $30 a barrel, 70 per cent below its 2014 peak, this was the most pertinent concern raised by BG’s army of small investors at a packed meeting in London on Thursday to approve the Shell takeover. Andrew Gould, BG chairman, said the board had paid “considerable attention” to the measures outlined to safeguard the dividend. In other words, Ben van Beurden, Shell’s chief executive, should be trusted to deliver.

The problem with this, say critics, is that the bid for BG, announced in April, followed a quarter in which Brent had traded at about $55 a barrel. The assumption then was that the economics of the deal worked at prices nearer $90.

Chart: Shell-BG deal spread

In the weeks that followed, as crude fell, Shell sought to reassure by saying the deal also worked at $70. But Brent has since tumbled to half that level.

Shell now says the deal works in the “mid-$60s̶1; — but even that requires a substantial recovery in Brent crude. Moreover, while the industry has embarked on savage cuts, mainly to spending on new projects, it has yet to feel the cash flow benefits from falling labour and equipment costs. This will take time. Hence Shell's 8.4 per cent dividend yield.

Yet, for all the risks to cash flow, analysts say Shell is well positioned to weather the storm. Irene Himona at Société; Générale says that, assuming Brent stays at $30 for the first half of 2016 and averages $40 for the year, the combined group’s organic free cash flow — what is left after capital spending — will be negative in 2016, but increase to about $4bn in 2017, assuming crude rises to $60 by then, higher than the $40 to $45 range currently suggested by futures markets.

Brazil is the big prize for Shell in BG deal

Ben van Beurden, Chief Executive Officer of Royal Dutch Shell, addresses a press conference in central London on January 29, 2015, to release its fourth quarter results announcement and its fourth quarter interim dividend announcement for 2014. Energy group Royal Dutch Shell on Thursday announced an eight-percent drop in annual net profits owing to a slump in global oil prices and said it would accelerate spending cuts. AFP PHOTO / BEN STANSALL (Photo credit should read BEN STANSALL/AFP/Getty Images)

Speculation that Royal Dutch Shell would buy BG Group has been doing the rounds of the oil industry for at least the past 20 years. On Wednesday, it became reality.

The dividend cost would be about $15bn in 2017, if the payout is set at the same level earmarked for this year. Shell should all but close the $11bn gap with organic free cash flow through proceeds from asset sales, and it could further trim its capital spending budget. The group could also borrow more.

True, Shell expects a one-notch cut to its investment grade credit rating once the BG deal is completed, because of weaker oil prices. But additional funding costs would be minimal, says Ms Himona. And in a $60 world Shell will be a “formidable powerhouse” of LNG and deepwater assets.

“The difference between a supermajor and other oil companies is that a supermajor has a huge balance sheet, in this case a $400bn balance sheet which is highly rated,” she argues. Shell will “take the pain” long before it considers cutting the dividend, she adds.

If there is to be a cut, as the market fears, that debate still looks some way off. As Chris Wheaton at Allianz Global Investors puts it: “Many other things will go wrong in this industry before we get to dividend sanctity.”
Speaking to shareholders this week, Simon Henry, Shell’s chief financial officer, said this of future dividend prospects: “We have not made a statement about the dividend beyond 2016 other than there is no change to the dividend policy, which in simple terms is to grow in line with earnings and cash flow.”

[montyhedge] 30/1/2016 08:16

Do BG holders get this quarter dividend, figures next week.

[enturner] 30/1/2016 05:24

Spob, You say '-div'. I thought that the Q4 RDSB div was payable on all new shares issued under this deal? This is why I've chosen the 'maximum shares' option. RDSB Div payable, no stamp duty and broker fees. ENT

[mac15] 29/1/2016 17:24

Thank you 84stewart.

[woolybanana] 29/1/2016 16:16

Thank you spob.

[84stewart] 29/1/2016 16:12

Could be up to 14 days after deal has gone thru for cash ,shares should be credited right away that what my online broker said

[mac15] 29/1/2016 15:55

When will the 3.83 be paid and the Shell B shares issued?

[spob] 29/1/2016 13:36

383p + [0.4454 * (RDSB - divs)]