Bp Share Discussion Threads

[invisage] 09/2/2021 13:29

Sleeping like a baby here Irish....I have held BP from the bottom...

Keep shorting Oil stocks that have lead the recovery in 2021..........Energy is the best performing sector in 2021.....

I personally would go for laggards if I was into shorting, not leaders.

[invisage] 09/2/2021 12:58

BP gone red, added.

Should go blue on the US Open at 2.30PM.

[smurfy2001] 09/2/2021 12:58

Well to tick down someone requires a blue paid membership. That someone is either very bored or there's another reason I'd rather not say.

[bracke] 09/2/2021 12:56

grand



EDIT

To show all three.

[geardown107] 09/2/2021 12:54

Who's the secret idiot that is thumbs downing every post? A social misfit, or just socially inept?!

[invisage] 09/2/2021 12:40

Also you are forgetting the buy back that will kick in later this year, historically buy backs have resulted in large re-rating of BP Share price.

[geardown107] 09/2/2021 12:39

Add to that that the forecourt price is going up as is oil. It won't be long before the bigger investors jump back in.

[grand time] 09/2/2021 12:39

Bracke
“Brent Crude (Blue)/ BP comparison.“ Do you have a similar Brent crude/RDSB comparison chart, to see the difference?

[invisage] 09/2/2021 12:19

Given BP expect to make high returns on their new strategy it is reasonable to expect a decent recovery in the Share price.

Once BP prove they can deliver on the new strategy the price will re-rate quickly....Renewable stocks are in a bubble, BP is no where near as priced the same as the Renewable stocks......

[imastu pidgitaswell] 09/2/2021 12:11

94475 - well yes, they can't fall every day (from over 300), and they do still currently produce oil and gas. So they will move with the oil price.

It doesn't indicate what they will be doing over the medium term, does it?

I'm not saying they will fall from here, nor that they will go up. I am saying that expecting them to return to where they were, and for the reasons that they used to move, is not reasonable given that the strategy and the facts have changed.

[cromw3ll] 09/2/2021 12:01

I asked about the debt size, that's my worry, seen too many oilers struggling with large debts and it seems the share price is getting affected by the debts.

[invisage] 09/2/2021 12:01

BP are being conservative imo.

Better to underplay and over deliver.

[irish luck] 09/2/2021 11:57

Read between the lines,

In the first half of the year we expect net debt to increase, omg

We continue to expect to reach our $35 billion net debt target sometime around 4Q21
and 1Q22, omg a year away.

As a reminder, on reaching $35 billion net debt this will trigger our
commitment to commence buybacks from at least 60% of surplus
cash flow, subject to maintaining a strong investment grade credit
rating. yes credit rating could be a big problem.

I could go on, but it would only send you crazi

[skinny] 09/2/2021 11:55

May be worth listening here on Thursday :-

.

[invisage] 09/2/2021 11:54

BP’s shares rose by almost 10p, or 4 per cent, to 262p, aided by rising oil prices.

[imastu pidgitaswell] 09/2/2021 11:47

Does nobody read the stuff I put up? 🤓

Or indeed the company's own stuff?

This is not going to be an oil and gas exploration and production company anymore. Rightly or wrongly, they are no longer going to be undertaking exploration or relying on the production of hydrocarbons going forward. If you want that, buy Shell or Exxon or whoever. BP have determined that they will move away and transition into renewables. Starting with a $40bn debt and a lot of oil and gas assets - which isn't great, imho.

But this is not going to revert to what it was. It couldn't be clearer.




BP will pay more than £900 million for rights to build offshore wind farms after bidding the highest price in a Crown Estate auction that could deliver billions of pounds to the Treasury and the Queen.

The oil major made its first move into UK offshore wind by bidding with EnBW, of Germany, to secure two seabed leases in the Irish Sea at prices that far surpassed industry expectations.

In total the Crown Estate awarded rights to six leases that could support almost eight gigawatts of offshore wind capacity, or enough to power more than seven million homes.

Critics warned that the auction may end with consumers paying more than necessary on their energy bills to enable developers to recoup their costs.

Winning bidders, which also included RWE, of Germany, and Total, the French oil group, will pay a total of almost £880 million a year for options to develop wind farms at the sites. They will pay the fees for a minimum of three years and up to a maximum of ten, delivering at least £2.6 billion and theoretically up to £8.8 billion to the Crown Estate.

However, BP and EnBW, which will pay combined fees of £462million a year, said that they expected to do so for only four years before commencing construction, or £924 million each in total.

The Crown Estate’s income is paid to the Treasury, which redistributes 25 per cent of it as a sovereign grant to Buckingham Palace. Government and royal sources emphasised that the level of the grant was up for review and could be reduced in anticipation of the increased income.

BP is one of the world’s biggest oil companies, producing 3.5 million barrels a day last year. It is accelerating its investment in green energy after a collapse in crude prices sent it to an $18 bil- lion loss last year. The government has committed to 40GW of offshore wind farms by 2030, up from just over 10GW operational today.

The Crown Estate’s auction of seabed leases was its first in more than a decade and was hugely oversubscribed.

Melanie Onn, deputy chief executive of RenewableUK, the wind industry body, said: “While demand for new offshore wind projects has never been higher, too few sites were made available to meet this demand. Any auction run on that basis will inevitably lead to high fees like these, and our concern is that this could ultimately mean higher costs for developers and consumers.”

Dan Labbad, chief executive of the Crown Estate, defended the fees, saying that the seabed was a finite resource and that it was “essential that we capture the right proportion of that for the nation”.

The government holds regular auctions in which developers compete for contracts guaranteeing that consumers will buy the electricity from their wind farms at a fixed price. Costs have fallen significantly in recent years, but analysts warned that prices would now be higher than necessary as developers sought to recoup lease fees. Dominic Nash, at Barclays, warned that “these inflated costs will be borne by consumers”.

Dev Sanyal, of BP, said that it could deliver its targeted 8 per cent to 10 per cent returns for a price lower than those in the last subsidy auction. The company expected the projects to be operational in 2028 and that they could use turbines with a 17-megawatt capacity.

BP’s shares rose by almost 10p, or 4 per cent, to 262p, aided by rising oil prices.



Note in the middle of that they produced 3.5m barrels a day last year. As discussed yesterday, they are targeting 2m in the medium term. By doing more of the above - selling oil and gas assets, not starting any more of them, buying into renewables and (they hope) reducing their debt.

[crazi] 09/2/2021 11:45

So this is were BP is now keeping in mind Brent has hit $60...


During 2021 we expect to continue to reduce our net debt.
Divestments and other proceeds will be an important contributor:

– With yesterday’s announcement of a 20% divestment of Oman’s Block 61, we have
now completed or announced transactions totalling over half of our target of $25
billion of proceeds by 2025; and

– We expect to deliver between $4 to 6 billion of proceeds in 2021, of which around
$4 billion have already been announced or completed. We expect the realisation of
proceeds to be weighted toward the second half of the year.

Turning to net debt.
We continue to expect to reach our $35 billion net debt target sometime around 4Q21
and 1Q22. This assumes oil prices in the range of $45 to 50 a barrel and bp planning assumptions for RMM and gas prices.

In the first half of the year we expect net debt to increase, as:
– Operating cash flow is expected to recover from the fourth quarter, benefiting from stronger oil prices, slightly higher production and a recovery in trading performance;

– However, we expect a heavier weighting of cash outflows in the first half of the
year as we incur the majority of severance payments associated with the reinvent
programme, make our annual Gulf of Mexico oil spill payment, and make the final
payment relating to our US offshore wind JV with Equinor.

(1) Forecast net debt at $45-50/bbl Brent (2020 real) and bp planning assumptions
(2) Dividend per ordinary share per quarter, intended to remain fixed at this level, subject to board discretion each quarter
(3) Surplus refers to surplus of sources of cash including operating cash flow, JV loan repayments and divestment proceeds, over uses, including leases, Gulf of
Mexico oil spill payments, hybrid servicing costs, dividend payments and cash capital expenditure
(4) Per share distributions: dividend per share plus total buyback expenditure divided by projected share count
(5) 2021-25 average, at reference oil price and bp planning assumptions Net debt¹ $bn

▪ Net debt reduced to $38.9bn at end-2020
▪ Expect $4-6bn divestment and other proceeds in 2021
▪ Expect to reach net debt target of $35bn around 4Q21– 1Q22 with oil price in the range of $45-50/bbl1


Dividend Buybacks ▪ Resilient dividend intended to stay fixed at 5.25 cents
per share per quarter

▪ Commitment to return at least 60% of surplus3 cash flow via buybacks once net debt target is achieved In the second half of the year net debt is then expected to fall, supported by:

– The absence of first-half specific outflows already noted;
– A further improvement in operating cash flow supported by
Upstream delivery, easing of COVID-19 impacts on downstream
performance and further cost savings from reinvent; and
– With the receipt of the second half -weighted divestment proceeds.

As a reminder, on reaching $35 billion net debt this will trigger our
commitment to commence buybacks from at least 60% of surplus
cash flow, subject to maintaining a strong investment grade credit
rating.

This creates direct exposure to the delivery of our business plan and
higher commodity prices. Subject to the board’s decision each quarter, we intend to maintain a fixed dividend of 5.25 cents per ordinary share per quarter – our first
call on funds.

Together with our buyback commitment, this means that in aggregate
across 2021-25 we expect to deliver per share distributions equivalent
to over 10 cents per quarter at around $55 Brent and bp planning
assumptions, with upside to higher prices.

[invisage] 09/2/2021 11:40

Brent is back to Pre COVID, but BP is still well below.


Pre COVID you had Trump and the threat of increasing Oil production / Energy Independence for the US etc

Now you have Biden who is against fracking etc what this means is OPEC+ the cartel have a stronger grip controlling the Oil price. Even small amounts of excess Oil can have a profound impact on the price of Oil, therefore the huge threat of Shale Oil no longer present is a big plus. The market has not priced this in yet, when the world reopens, most probably in March / April and demand surges and it becomes difficult to supply this will be more apparent.

Before Opec+ had rising shale oil flooding the markets which caused downward pressure on the Oil price, that is no longer the case.

The Saudi's will want to balance their budgets and milk the Oil price as much as they can before the Green agenda takes effect, the Green agenda will come in play next 2 decades overtime.

However BP share price will move based on events in the coming weeks and months.

[bracke] 09/2/2021 11:33

Brent Crude (Blue)/ BP comparison.

[invisage] 09/2/2021 11:23

At $70/Brent BP produces 2 times the free cashflow as the Dividend......the debt will fall a lot quicker than expected and buy backs likely to start sooner than expected if the Brent price continues to firm, see slide 14.

[skinny] 09/2/2021 10:45

Per chance to ......

[invisage] 09/2/2021 10:34

I see a big gap on the chart, it is called Pre COVD prices.

The target is £4.50

[irish luck] 09/2/2021 09:53

Morning,

Target hit this morning 266, and gap of 267.1 was filled.