Shell Share Discussion Threads

[essentialinvestor] 13/1/2016 15:36

Added at 1348, looking to buy another few.

Few more at '41.

[eaaxs06] 13/1/2016 15:35

The oil price has just dropped like a stone - and Shell with it!

[montyhedge] 13/1/2016 15:04

All I know is with the weak £ v $ the dividend yield is 9.1%All companies reporting in $ better off.Astra Zenneca, Shell, HSBC etc.Roll on 4th Feb finals.

[whiskeyinthejar] 13/1/2016 14:45

Thanks fun time.

Yes the LNG price is important,but pessimism about oil and gas prices will already be in the BG shareprice as its fell from £15 to £10/£9.

Why will there be floods of unwanted Shell shares? Are BG shareholders getting shares that are overvalued? Will they be upset at prospect of fat dividend? I don't think Shell is currently over valued and deal is a good one. Large shareholders hold in both companies so they are happy to hold Shell. And deal allows for mix and match. So if you looking for an exit you can apply for more cash.

[imperial3] 13/1/2016 14:32

After the deal the market will be flooded with unwanted Shell shares.

[careful] 13/1/2016 14:20

according to Shell offer, this deal will add 25% to reserves, 20% to production.
a great strategic move, well timed.
hopefully any increases in Gas/oil prices will occur after the deal is sealed.

[imperial3] 13/1/2016 14:05

This of course hinges on the price of LNG.

[funtimejonny] 13/1/2016 13:53

Good post Whiskey!

[whiskeyinthejar] 13/1/2016 13:45

Rdsb price will rise on completion imo

BG are moving from investment phase to production phase. They've spent years investing £13 Billion into Queensland Gas. Huge amount of money. That's the same as the cash element of the Shell bid.

So look at it this way. With the cash element Shell gets the Oz Gas facilities. These will also be used to help bring Shell's existing Australian assets to market.

And the dilution is 20% which pays for a 25% increase in Shell's proven oil and gas reserves.

On top of this, Shell has identified $3.5 billion of cost synergies.

BG shareprice has suffered since 2012. I haven't followed this closely, but I believe falls are largely due to project having overran in Oz and same problem as oil with too much global gas supply. Problems with the project (fluctuations in Australian dollar and materials) has depressed BG shareprice and depressed BG shareholders. BG was trading above 15 quid, but Shell is paying only about 10 quid for BG now.

With BG ramping up production in Brazil and Oz, and Oz Gas no longer soaking up the cash, BG will be generating large amounts of free cash this year. If Shell had decided to wait another year to bid, I think BG would be trading higher. Depends on LNG prices of course, but similar to oil, LNG capital projects are also being cut.

Anyway imo Shell will rise on completion. Firstly because cheap way into buying Shell shares (by buying BG) disappears. Also uncertainty is removed. And market will stop asking could Shell have paid less and instead focus on enlarged company prospects which will be worth more than sum of two individual companies because of the synergies.

This is Shell focusing on its strengths which should bring further cost savings. It wrote the book on LNG and deal cements it's position as LNG market leader. Number one globally for LNG.

[imperial3] 13/1/2016 12:45

The producers each and individually only care about themselves.The taps are full on,as with some,oil is their only source of revenue.There will be no united front to reduce production,because their own self interests are so dominant.

[imperial3] 13/1/2016 12:03

I just wonder how much the share price will recover if the BG deal is ditched.

[careful] 13/1/2016 11:58

A difficult situation for OPEC but what would we do in their position.
They are not as important as they used to be.
They collectively produce about 31m barrels/day out of a total of about 94.
If they cut production to increase prices, the rest will increase production.
Non opec produces 63m barrels/day.

[essentialinvestor] 13/1/2016 11:45

Do people really think SA won't ultimately blink, I can't predict the
RDSB share price but we all know with near certainty (yes it's a split infinitive)
that OPEC will coordinate cuts, just a matter of timing.

[rcturner2] 13/1/2016 11:42

MB, no problem, always happy to be challenged, better to have debate than silence.

[whiskeyinthejar] 13/1/2016 11:37

I think Saudi Arabia will be OK for a bit with low oil.

But Venezuela oil price has hit $24 and their bonds are trading at junk. I'm not sure this will mean welfare cuts, civil unrest etc. Or they were trying to convince their Russian buddy Putin to cooperate on cuts with Saudi. But they are heading for default within months.

[mick bell] 13/1/2016 11:10

Thank you WhiskeyInTheJar

I stand corrected, my good fried the Saudi Oil Minister obviously was factually incorrect. By a country mile!

Apologies to RCTurner2

Regards
Mick

[sogoesit] 13/1/2016 11:07

There is a "mix and match" offer, stewart.

Here are your options:

"1. 0.4454 new ordinary B shares of EUR 0.07 in Royal Dutch Shell and GBP 3.83 in cash (Default)
2. Maximum cash election (if option is scaled down, you will receive B shares)
3. Maximum share election for B shares
4. 0.4454 new ordinary A shares of EUR 0.07 in Royal Dutch Shell and GBP 3.83 in cash
5. Maximum cash election (if option is scaled down, you will receive A shares)
6. Maximum share elections for a shares mix and match facility under the scheme holders are being offered the facility to elect to vary the proportions of cash and Royal Dutch Shell shares they receive."

and

"The total number of shares and the maximum aggregate amount of cash to be issued of new shares and the maximum aggregate amount of cash to be issued will not be varied. Accordingly elections will only be met to the extent that other shareholders make offsetting elections and elections that cannot be met in full will be scaled down pro rate.
The mix and match reference price is due to be announced on 15 February 2016."

Regards,

[84stewart] 13/1/2016 10:53

Got options thru online broker option 4 all cash of what BG or shell equivilante broker does not know

[eaaxs06] 13/1/2016 10:33

montyhedge 12 Jan'16 - 11:29 - 5227 of 5270 0 0

"No way will they cut. CEO has said.

With the weak £ and Shell earnings in $, the yield by my calculation is 9.4% paid quarterly.Thats with a unchanged dividend, may even be raised on Feb 4th Finals normally is."


Hiya, monty, hope you’re well.

Shell normally pay dividends in 4 equal payments through the year, so the final is always the same (in US$ terms)

In tough times they (like now) they maintain the same level of dividend for the coming year, so don’t get your hopes up that it will be raised.

[mick bell] 13/1/2016 10:09

Hmmm,
That old Jason Turvey story from September last year, repeated in the ft last
November.
Of course he is probably better informed than the Saudi Oil Minister about
their budget spending. However much has changed since September last year
poo dipping under $30 yesterday for one, so perhaps the Saudi's have re-evaluated
their fiscal strategy.

[rcturner2] 13/1/2016 09:20

Saudi Arabia to tap global bond markets as oil fall hits finances

[mick bell] 13/1/2016 09:16

RCTurner2
"imperial, they either have to borrow, find other sources of income or cut their expenditure."

Saudi Oil Minister said yesterday poo at $30 per barrel meant a $25 billion
shortfall in the Saudi 2016 spending budget.
He also said they had over $600 billion in reserves so did not see this as a
major short term problem.

[essentialinvestor] 13/1/2016 09:03

Does he live alone? ) - only joking monty