Bp Share Discussion Threads

[erric] 28/4/2021 19:21

I think you are absolutely correct in your summary

[gwatson56] 28/4/2021 18:31

This (see below) quote is by BL from a GS question on the Q&A pack on the BP Investor section.... Not sure if this has been posted ?

Michele della Vigna (Goldman Sachs): Thank you very much and congratulations on the strong result. I really had a question on dividend and cash return to shareholders. You are about to embark in a major buyback programme which, if we take into account the current share price, the current oil price, could effectively reduce the share count by about 20% by the middle of the decade. I was wondering in this context, why keep the dividend per share (DPS) flat? Why keep it static? I can understand why an oil and gas company would not want to actually grow the commitment to the dividend payout. But on the other side, as the share count shrinks, I was just wondering why not grow the DPS without actually increasing the dividend burden for the company? Perhaps you need a bit more time to start reducing the share count now that you have reduced the level of net debt, but I was thinking is there an opportunity where the dividend comes back to growth?

BL response (extract)

"The dividend policy is as stated. The buyback programme has now kicked-in, and we believe, and believe quite strongly, that in a moderate price world, as we look over the next year or two, investors can get back to that pre-pandemic cash distribution levels, and that’s very possible as we head into next year."

Good day today...eyes down on RDS tomorrow AM

[dandu69] 28/4/2021 18:14

hxxps://oilprice.com/Energy/Energy-General/Goldman-Oil-To-Hit-80-On-Largest-Ever-Demand-Jump.html

[wolansm] 28/4/2021 16:59

Agree entirely

[north sea boy] 28/4/2021 16:27

Not sure if I have this correct, but as I understand it, the 500 million buy back is $500 million cash - this equates to circa £360 million Stg. At current prices that will buy approx 119 million shares over an 8 week period. As average volume are around 60m shares traded per day, I don't actually think this is a BIG buyback, AND, as they are being handed back out to employees share schemes, the number of shares in circulation will not actually decrease, and therefore the share price will not increase directly through the buyback?

In theory, the direct outcome of the buyback activity (for this quarter) should simply be to avoid further dilution through the issue of "free" shares, and therefore avoid further erosion of current share price.

If the share price happily rises during the buyback activity period, then this will either be a happy coincidence, or market reflection of future anticipated fundamentals.

Of course, any further buybacks in H2 should in theory allow the shares bought back to be cancelled, and hence increase the net per share value.

Not trying to rain on the parade, as I am a longtime (and overweight long) holder, and I think these were an excellent set of results for this quarter. Does anyone have a differing viewpoint on this.

Best wishes

NSB.

(Sorry for duplication with other BP thread, but meant to post this here)

[counterpartymw] 28/4/2021 16:26

No I agree with your analysis, the buy back will almost certainly have no impact on the share price. For a company this large it would have to be several billion bought aggressively over a short period of time. Here they will simply hire Morgan Stanley or Goldman to switch an algorithm on which takes the opposite side of smaller sell orders (between 2000 - 20,0000 shares or something) over the course of each trading day until the full quota is reached. These algos are actually designed NOT to move the market so they get the cheapest prices possible. This is good for BP in that they'll be getting half a billion worth of shares at decade lows and prevent dilution from employee rewards, but yeah, not much in it for shareholders beyond that.

[portside1] 28/4/2021 16:23

It will jump when you least expect it too

[north sea boy] 28/4/2021 16:17

Not sure if I have this correct, but as I understand it, the 500 million buy back is $500 million cash - this equates to circa £360 million Stg. At current prices that will buy approx 119 million shares over an 8 week period. As average volume are around 60m shares traded per day, I don't actually think this is a BIG buyback, AND, as they are being handed back out to employees share schemes, the number of shares in circulation will not actually decrease, and therefore the share price will not increase directly through the buyback?

In theory, the direct outcome of the buyback activity (for this quarter) should simply be to avoid further dilution through the issue of "free" shares, and therefore avoid further erosion of current share price.

If the share price happily rises during the buyback activity period, then this will either be a happy coincidence, or market reflection of future anticipated fundamentals.

Of course, any further buybacks in H2 should in theory allow the shares bought back to be cancelled, and hence increase the net per share value.

Not trying to rain on the parade, as I am a longtime (and overweight long) holder, and I think these were an excellent set of results for this quarter. Does anyone have a differing viewpoint on this.

Best wishes

NSB.

[optomistic] 28/4/2021 16:08

Porto. my last was at 291 following 302 sure they are going to be OK but the old lady does have a habit of keeping we impatient youngsters waiting....LOL

[portside1] 28/4/2021 15:58

Op I have added a few more

[planit2] 28/4/2021 15:34

Completely agree and also hope for a rise.
In the mean time I am still happy with the reasons I invested and believe it is more than 20% undervalued.

[counterpartymw] 28/4/2021 15:26

If people here are selling up and throwing in the towel, that makes me think we could be on for a massive rally any day now. Typical stock market behaviour, people buy in at a good price, but despite strong results and high oil prices, due to a lack of movement in the share price become impatient and quit. Doubting their fundamental analysis and believing 'there must be something going on I don't know'... it's normally about now when people have had enough, that this may rise.

[plastow] 28/4/2021 15:17

It's to early to sell the doller is still falling the means higher oil prices and just before x divi this has further to go on the upside.

[optomistic] 28/4/2021 14:52

Crazi it seems a bit harsh dropping BP altogether so soon after results. If you have a good home for the loot then all well and good but like WINDJAMMER I would be a bit at a loss to reinvest at the moment...or perhaps Lloyds is about to move ahead fast after their results this morning?

[philanderer] 28/4/2021 14:49

Much better today :-)

[w1ndjammer] 28/4/2021 14:44

Crazi what you going to buy? i have been searching all morning, and can`t find
anything as good as this one over the next 12 months.... given the lower risk
due to very low SP

WJ.

[spawny100] 28/4/2021 14:38

Must have been your selling holding it back Crazi ;-)

[crazi] 28/4/2021 14:22

That's me out at 303 (from 291 since Friday).

Also sold my long term holding batch from 200 to 303...

So holding zero BP now for the first time since October...

Good luck.

[skinny] 28/4/2021 13:47

Nice to see BP potentially involved with Green Hydrogen as their TU yesterday made plenty of references to Blue.

.

[gwatson56] 28/4/2021 13:17

See from the report that production for the qtr was 1,309mboe/d. It was noted that underlying production decreased 7.4% through reduced capex and decline. Rosneft in February advised of a 5% decline in 2021 (no reason provided), I suspect similar reasons to BP's decline. I am not sure given the turmoil of the past year and associated cuts in capex with field declines worldwide that the so called slack in the system is as great as we are led to believe.

Shell report tomorrow (suspect not as good as BP) and will find out similar metrics around underlying capex and decline.

Reading the rational for the GS target of £4.70 is that they believe that the supply is more constrained if demand bounces back as they think later in the year.

Some would point to the US to ramp up quickly, this needs money....... The report below notes conservative hedging around the $40 mark and this will hamper any ramp up.



btw I am in the Hydrogen camp for future energy BP is imo positioning well in this area.

[richvandam] 28/4/2021 13:04

What is the basis of this claim? Everything looks fine on the accounts sheets, the previous quarter issued a profits warning for Q1 this year, this never transpired to be an issue.

The 500million buyback began today in small lots and will expire in June, share price should increase in theory. 500million buys is a lot to counter.

BP are under pressure from institutions to get the share price back upto the previous levels as they have large pooled holdings at significant losses. This is the route they have chosen to get the share price back to those levels, with the further intent to restore the previous dividend levels once an acceptable dividend yield is established.

[meb123] 28/4/2021 13:00

According to the FT page 11 BP will be initially offsetting the dilution from employee shares schemes at a cost of 500m in Q2. That suggests from Q3 onwards the buybacks will reduce the number of shares overall .