BP should be heading towards $34/sh, as we will learn the Fed April's meeting notes to indicate lower for longer and oil prices breaking the $50/b mark by next week. The phycological point will boost IOCs shares and BP is clearly undervalued. As we look into 2H/16 with oil stabilizing in the $55-$65/b, BP has the potential to reach $38-$42/s. At this levels, the companies dividends are saved and new large investments will likely be announced. New areas of explorations are also likely to emerge such as Mexico, Iran and new assets acquisitions at distressed prices in West Africa. I see 2016, as a key turning point of the firm.
BP will not cut its dividend. It can afford the $6b/pa by increasing its gear ratio in 2016 (should borrow ~$4 to $6 against a $35/oil. In 2017, it should breakeven in terms of usage of cash if oil averages $45 t0 $50/b, which is a conservative estimate. This stock is likely to be c$40/sh by year end.