Shell Share Discussion Threads

[badtime] 19/1/2016 10:29

So what positions have u got? Long or short ...BG or Shell?

[zyzzyva] 19/1/2016 10:24

check out BGs Q3 results. the numbers were horrendous with EBIT down 70% and net debt rising by more than $1bn. that was in a period where the average brent oil price was $51. in Q4 the average brent oil price was $45 while today it is below $30.

imo if the deal was pulled BG shares could be £2, as the company is burning cash and has a $10bn debt pile. shell could then buy the LNG assets directly from BG for a knockdown price. it is just common sense.

[zyzzyva] 19/1/2016 10:20

WhiskeyInTheJar that is in fact what i am doing. you have been brain washed by the BOD.

[badtime] 19/1/2016 10:17

Another day of nail biting debate :)

[whiskeyinthejar] 19/1/2016 10:00

Oilprice.com reports some sour shale oil being sold for $-0.5 barrel. So producer having to pay to take it away. Sour oil, but even so, bit of an incentive to give up and cut supply.

It also reports that Russian cash reserves will run dry by year end at current spending. Because of sanctions, I think Russia can't borrow?



Transnet report that Russia will cut by 600k bopd this year won't help either.

[whiskeyinthejar] 19/1/2016 10:00

Maybe you should compare cost savings with costs, instead of comparing cost savings with revenues?

And cost synergies, so costs across the two businesses will be reduced due to economies of scale etc.

[zyzzyva] 19/1/2016 09:51

frankly i am highly sceptical of the $3.5bn cost saving figure, given that BGs revenues are only around $12bn. it can only be based on the assumption of massively inflated energy prices.

imo the BOD is in cloud cuckoo land

[zyzzyva] 19/1/2016 09:44

long-term view LOL! we are all dead in the long term!

fact is for the price they are paying for BG, they could now buy all of petrobras' equity three times over!

the BG deal does not make sense at the current oil price. it is a lie to say shells dividend is protected. in fact it will be slashed as a result of this deal, which i think boosts the number of shares outstanding by 19%.

would you still support the deal at a $1 oil price? it is about opportunity cost. at the current oil price they could buy many more assets with the £41bn being paid for BG. and there are many forced sellers of assets out there. the BG deal was structured on a $60 oil price that was assumed to rise to $70. it will take many years to get back to those levels.

[rcturner2] 19/1/2016 09:33

I think the BOD have a longer term timeframe than most of the posters on here who are negative on the deal. BG is a good fit for Shell, since it gives Shell much better access to gas and also significant reserves that Shell can exploit. The deal is specifically structured in order to protect the dividend, the BOD know what they will have to pay extra now there are additional new shares.

[ianood] 19/1/2016 09:28

If this deal was expected to fail it would have been "pulled" by now.

Take the longer view, you know it makes sense!

[waldron] 19/1/2016 09:26

"The Wise Man speaks because he has something to say ... while the Fool speaks because he has to say something."


"While the fool speaks, the wise man keeps silent."

[zyzzyva] 19/1/2016 09:11

BG has a trading statement tomorrow. its Q3 results were horrendous with EBIT down 70% and net debt rising by more than $1bn. that was in a period where the average brent oil price was $51. in Q4 the average brent oil price was $45 while today it is below $30.

[shaggies_view] 19/1/2016 08:54

Zyzzy - I see your point on acqusitions destroying value

hxxp://www.nber.org/digest/aug03/w9523.html

but never let a good deal making opportunity goto waste. Too many parties with vested interests with their hands in the cookie jar. This deal will go through regardless of value.

When does Shell report?

Shaggy

[imperial3] 19/1/2016 08:53

Good post Zyzzyva.

[zyzzyva] 19/1/2016 08:42

it is ridiculous how people try to sell the deal on the that basis oil will be $60 in 12 months. oil might well be $6 is 12 months and heading lower. i cant see $60 given the economic outlook. but it is irrelevant. it is about opportunity cost. there are plenty of high quality bombed out assets around now and shell could use the money to pick up some of these. there are forced sellers around such as petrobras. shell needs to be cashed up at times like this. paying top dollar for BG impairs shells financial flexibility at a time it needs to be cashed up.

[montyhedge] 19/1/2016 08:18

One thing dividend should be 32p sterling this quarter, that's say on a unchanged dividend.The weak £ helps a great deal for income investors.

[w1ndjammer] 19/1/2016 08:18

monty

oil will be back at $60 in 12 months and heading north, so pointless backing out now. another oil major will jump in.

WJ.

[montyhedge] 19/1/2016 08:07

Ok, £750m still peanuts to Shell, come back in 12 months.Bid 600p cash. BG shareholders would still take it.

[84stewart] 19/1/2016 08:05

U own a small part of the company ,I would say less than 1% ,the big boys own the rest ie: insurance,banks,&;funds.

[w1ndjammer] 19/1/2016 08:05

monty

you are wrong 750 mill plus fees.

WJ.

[montyhedge] 19/1/2016 08:00

We own the company not directors.

[montyhedge] 19/1/2016 07:59

£106m in fees, peanuts. CEO ego pushing this through vote NO.

[diku] 18/1/2016 23:48

If the deal goes ahead then how much more do insiders line up their pockets?...