Bp Share Discussion Threads

[portside1] 29/4/2021 12:04

But after these payouts to staff divs will rise

[spagboll] 29/4/2021 12:03

Any comments on the announcement this morning other than the buy backs have started. I do note that it states the shares purchased yesterday will be cancelled, as opposed to held in treasury which as I recall is typically what happens if they are to be used to meet employee share schemes. Perhaps the purchases yesterday were what helped the share price and reasonable to assume the same today.

[portside1] 29/4/2021 12:03

Reading all the up date it appears all the profits will be swallowed up by staff and directors bonuses

[crazi] 29/4/2021 11:34

I hope you guys grabbed some Tullow this morning at opening!...


Yes Shell did the right thing increasing the Divi - BP Should have and focussed less on their Buy Back Bonuses...

[planit2] 29/4/2021 10:19

When a company offers shares to it's employees it is a sunk cost and will show in the accounts. They then need to get the shares from somewhere, they can either use shares they hold in treasury or if they have none they will have to issue new shares.
The new share issuance will result in a dilution in EPS.
If they borrow money to buy the shares they need on the open market then debt rises (but share scheme liabilities will fall) and the EPS does not change.

The point is the share scheme is accounted for when the bonus shares are entitled to.

Regarding the North Sea post, I agree that this buyback shouldn't affect the share price too much as it is low. I prefer this than new share issuance because I don't want my EPS diluted.

But this is only the start of a much bigger share buyback scheme, in the call GS asks a question which implies 20% of all shares will be bought back by 2025.
This will increase EPS by 25% (and therefore shareprice) on it's own.

I wish it was clearer when the next stage of the buyback will start, it could be after the next qtr earnings but perhaps only if BP manage to overcome the cash flow deficit they are expecting. We will just have to wait and see but this uncertainty is clearly affecting sentiment.

[optomistic] 29/4/2021 09:45

biddy74, it shows that Shell does have an interest in the shareholders, they reinstated the divi and have now increased it, sorry do not have all the figs to hand but I am sure someone will have :-)

[biddy74] 29/4/2021 09:32

Indeed opto but how far did they cut their dividend back and compare that to BP’s cut

[optomistic] 29/4/2021 09:27

Shell increased divi for the second time.
Adding shareholder value!

[richvandam] 29/4/2021 00:31

Are your saying that when BP assigns shares to its employees, it issues more shares to the market (further dilution); effectively creating more shares and issuing them rather than assigning them shares currently in issue?

I’ve emailed them to clarify

[rogerramjett] 28/4/2021 21:46

I added here this morning as well as buying my first batch of Total. Long term view but both BP and Total have a similar strategy in transformation towards an energy business.

[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.