Bp Share Discussion Threads

[planit2] 06/5/2021 14:07

Thanks
Only $14bn to go @~1.2bn per year until 2033!

[planit2] 06/5/2021 13:11

RE the oil spill payments, I have found it difficult to get up to date figures of projections. In 2015 there seemed to be an agreement to make payments for 18 years which would end in 2033.
There should be provisions/contingencies for this in the accounts, has anyone got a list of projected payments each year?

[marktime1231] 06/5/2021 12:15

Thank you gwatson56 for your interesting analysis, quite agree with the idea that the official forecasts are deliberately underplaying things in order to deliver out-performance. We also have the possibility of a faster than forecast return of oil demand in some economies. More hopeful than you that Henry Hub and the European equivalent for gas prices Dutch TTF will advance, the latter just keeps getting stronger as though the demand for energy is exceeding supply from renewable sources.

I had not picked up on those Q2 cost warnings until now, there are still efficiency costs to pay. And an ongoing oil spill bill which I was hoping would be mostly behind us now, is there no end to the $1.2B levy, is it annual at that level and for ever?

Despite those "headwinds" I suspect BP to smash the underplayed expectations, Brent knocking on the door of $70 and Oldman Sacks saying watch out for $80.

Isn't the Gap what you can see the sea through the South Downs?

[skinny] 06/5/2021 12:03

planit2



:-)

[optomistic] 06/5/2021 11:59

That is being optimistic planit
....try 310 and then 304 Petric.

[petrich] 06/5/2021 11:26

where is the Gap please ?

[pander45] 06/5/2021 11:00

Yep it's going for the gap....

[slinkyj] 06/5/2021 10:58

Don't tell me it's going for the gap

[veryniceperson] 06/5/2021 09:17

There holding up very well for ex dividend Day, so far that is!

[planit2] 06/5/2021 08:49

@gwatson
Completely agree with your analysis. I stopped working the figures in the end as they just seemed too good.

if oil prices stay where they are, then $1bn buybacks per qtr seems good but if they are to return "at least" 60% to shareholders then they will need to go over this figure in Q4 and Q1 2022.They could easily be buying back $6bn in 2022.

[ny boy] 06/5/2021 08:34

Not a bad reaction if it’s ex div day? Can’t remember thought it was 06 May

Looks set for a strong recovery, done my shopping, stay long for years imo

[gwatson56] 06/5/2021 08:31

Did a little reading and below are some interesting statements from the Qtr 1 results , press briefing and the weekly trading conditions update.






The Wall Street Journal (27/4/21)

“We’ve got a pretty optimistic outlook on buybacks for the remainder of the year but we’re going to do it quarter by quarter,” said BP Chief Executive Bernard Looney. “Depending of course on [the oil] price, I think next year you can very easily imagine a world where our distributions to shareholders are at or above the pre-pandemic levels”

Translated in my mind to 1.064B per quarter in Dividend’s and as per above expectation this financial year [reckon from qtr3] 1.064B per quarter on average for buybacks. Note that surplus cash flow @ 60% is after the cost of the $500M in qtr 1.

Also note the assumption is the oil price (reckon circa av qtr2 $65 myself) and if Goldman Sachs are right at $80 third quarter then BP have stated for full year 2021 every $1 increase in POO ($50 is their stated expectation) is worth an extra $340M (annual), so that will be the “above” bit…

The 2 notes quoted below were within the First Quarter 2021 results.

“BP is introducing an intent going forward to offset dilution from vesting of awards under employee share schemes through buybacks. Surplus cash flow* is now defined after the cost of buying back these shares.”

“In addition, bp remains committed to returning at least 60% of surplus cash flow to shareholders through share buybacks, subject to maintaining a strong investment grade credit rating.”

Translated again from the qtr 1 results $1.7B surplus cash and note the $500M is deducted therefore I reckon the surplus cash war chest is some $1.2B which equates to $720M “60% for shareholders prudently carried forward to qtr2 (assuming no loss to cover).… Well that’s my reckoning….


Moving on I was also interested in the statement’s from the qtr 1 results .

“During the first quarter, bp generated surplus cash flow of $1.7 billion after having reached its net debt target of $35billion. During the second quarter, cash flow is expected to be impacted by the $1.2 billion pre-tax annual Gulf of Mexico oil spill payment, further severance payments and a smaller improvement in realized refining margins relative to the quarter to date rise in our RMM*. As a result of these factors we expect a cash flow deficit in the second quarter.”

“In the second half of the year bp expects to generate surplus cash flow above an oil price of around $45 per barrel with an RMM of around $13 per barrel and Henry Hub of $3 per mmBtu.”


What we need to note is that BP is explicit in stating that qtr2 to qtr4 2021 it uses $50 for Brent. We know that for every $1 over $50 BP generates a additional $340M (annual). RMM and Henry Hub I reckon will be cash neutral qtr2 …so it is a case of doing the maths and you can see why BL is so upbeat.. FWIW I expect BP to again surprise on the upside qtr2 and double the buyback in qtr3.

BL reminds me of the smart people at work who greatly under promise and then over deliver ..All in all seems like to me that the share price will be heading north assuming the POO does not tank… imo….

[eurofox] 06/5/2021 08:28

interesting - glad I didn't sell prior to this ex div date

[planit2] 06/5/2021 07:41

Unfortunately you need to work out the ideology of the person writing the article before you digest it.
The media is now infested with people that have religious strength belief in their views on the world and climate crisis and they believe it is their vocation to 'educate' the world to make it a better place.
As much as they are blinded to the truth by their religion, they also justify 'bending the truth' as it is in the worlds interest.

Result is you get terrible analysis, purposefully missing out inconvenient facts and punctuated with untruths.

I just see this as a great opportunity as I can pick up investments (that are necessary for the well-being of the people on the planet) for a fraction of what they should be. Look at the Methodist church selling Shell or NEST selling out in November (on behalf of the country's pensions).

[scruff1] 06/5/2021 05:52

Ex div declared

[scruff1] 06/5/2021 05:52

Ex div declared

[smurfy2001] 05/5/2021 22:13

Good to see some healthy rises. Still think it's cheap

[marktime1231] 05/5/2021 21:42

The guidance from Investors' Chronicle is frequently so laughably wrong it is becoming a reliable contra-indicator. When they say Buy it is a good time to Sell, and vice versa. How they still get space in the FT is beyond me.

A goood example is the advice from their BP analyst Alex Hamer. He yelled that BP was a Sell when at a 190p low in October 2020 on the grounds there were no rewards on offer, ignoring that the rebased yield was 8%, ignoring OPEC+ production caps were supporting Brent, ignoring the recovery outlook and green shift.

The twerp doubled down his Sell advice when BP had recovered to 258p in February 2021, on the grounds that the debt reduction required to allow shareholder returns to improve were out of sight. Meanwhile everyone else was seeing a tremendous oil price surge and increasing hopes for demand recovery. Looney has since announced the $35B debt threshold had already been reached in March.

Following super Q1s and with BP trading around 300p again, Alex Hamer has completed his stubborn blinkered hat-trick by again declaring Sell, because "we remain sceptical". Meanwhile the bullish forecast for a super-cycle in commodities and Brent testing $70 has sent the share price up to 318p, ahead of a serious buyback programme to begin in H2. Even more significantly, gas prices which drove up BP's Q1 performance have continued to strengthen.

I wonder who is the "we" sharing Hamer's inept view, and how bad you have to be get the boot from IC who seem happy to keep presenting his analysis without apology or reflection on how serially bad it is. In summary, if you need proof that BP is a Buy and will see the 350-360p level soon, here it is.

[plastow] 05/5/2021 20:26

Last x divi they dropped of a tad then went on to make new highs so don't be fooled by the derampers this has got more legs in it but beware of the DT on oil which will be sold of for a few days then recover.. I'm loving the ride to recovery.....

[north sea boy] 05/5/2021 19:26

Shares trade Ex-Div tomorrow, so it will be interesting to see what impact that has on price direction? Hopefully it will drop by less than, or no more than, the dividend to maintain the recent good momentum?

NSB

[veryniceperson] 05/5/2021 16:54

What a lovely finish to the day. After yesterday's rise thought there might be some profit taking. The shares seem to be in a upwards trend, or is it just me hoping.

[philanderer] 05/5/2021 14:20

BP has told office-based staff they will be expected to spend two days a week working from home after lockdown restrictions ease.

The oil giant said in meetings last month that most would be asked to work from home 40% of the time, or two days a week for full-time employees.