How do you know the assets are based upon $90 oil prices, $18 billion of debt is off books, and 1/3 of all BP assets in in Russia? Oil price is currently at 40 but it is not static. How do you know it will remain at 40 over the next year or 2? I'll go out on a limb and say oil prices will be higher and not lower over in that time frame. Oil was at a lower price in 2009 and it went to 100 pretty quickly. Unless you can cite your source, I will dispute you "facts". Why do I only see your posts when BP is trading near the lows. Where were your posts when BP was trading above $50? You have been stating for a while that Russia will seize BP's assets in Russia leaving BP with nothing. While it could possibly happen, it still has not taken place. If BP did not hit your price range during the height of the Macondo mess and company solvency fears, what makes you think BP will drop to 23-25 now? BP is a well financed integrated oil company that should be able to weather the current low oil price situation. My 12 month conservative target price is $40 which would be a decent return if purchased at the current price.
onewaytomars4: You seem to post near BP's low. Last time you posted was when BP was trading around 36-37 in March. Since then, BP traded higher and your posts stopped. Now that BP is near 36-37, you post again. A better play may be to buy BP while you are actively posting and sell when you have stopped posting for a few days. Russia can steal BP's investment, but that seems to be as likely as UK going to war against Russia. The earnings shortfall came from the additional writedown of 598 M from the middle east and the Macondo Settlement of 10.8B. If you exclude both writedowns, BP would have beaten estimates with earnings slightly over 60 cents. The earnings has some good news if you look beyond the headline. The amount of money from BP's Rosneft investment is up more than twice from last quarter. Upstream production is up from last quarter prior to any writedowns. Refining margin has expanded. The decrease in downstream from 2.2B to 1.9B in profits is expected because BP's one time trading gains of over 300M counted towards last quarter. Cashflow was still pretty good and debt was further reduced. Reading the conference call, BP expects Capital Expenditure to come down as well as expenses related to oil production due to the lower oil prices. I do not see any way BP is going to 25 unless Russia nationalizes Rosneft and seize all foreign holdings. (Provocation for war?)
Not sure if earnings will be good relative to the 1st quarter.
Upstream profits decreased dramatically to 604 million. I expect the current quarter to be higher.
The bulk of the profits came from downstream. High refining margins let to 2.158 B in profits. Expect the current quarter to be roughly the same.
Rosneft investment accounted for 183 million in profits. Not sure about this quarter.
BP made profit with energy trading. It will likely be much lower this quarter.
IMO, earnings this quarter will like be less than last quarter. How much less I'm not sure. The concern I have would be the current quarter. I read news of crude oil oversupply leading to gasoline oversupply. This could negatively affect refining margins. In the wake of low energy prices refining margins are extremely importing to BP's bottom line.
My expectations (wrongly or rightly) are for BP to meet or beat earnings but guide down for the current coming quarter. The current stock price should be treated as buying opportunities if you have a long term time horizon (more than 1 year). I do not see oil prices staying this low for long. Most small e&p companies will likely go bankrupt and there will likely be more consolidation in this space.
Last quarter had lower oil prices and BP beat earnings estimate with 85 cents. That more than covered the 60 cent dividend. BP is an integrated oil company, E&P is only 1 component. As long as refining margins are good, that should make up a little for low oil prices. Oil prices in the 2nd quarter are higher than the 1st quarter. (April to June). Earnings are expected to be 52 cents. However, I feel slightly bullish and expect earnings to be at least 60 cents covering this quarter's dividend. The concern could be going forward as this quarter looks to be lower. (July to September), but the earnings for this will not be until late October. I do not agree that oil prices may stay around 50 for a long time. It wasn't that long ago when the same analysts predicted oil prices to hit 150 when it was trading over 100.
Bought back the shares below $40. The next date is August 13, 2015. BP web site calls this the "Reference Share Price" date. I might sell some shares on this date and repeat the sell/buy strategy until it stops working. IMO, the current dividend will probably hold at $.10 or $0.60 (ADR shares). 1 ADR share (US traded) = 6 ordinary shares in UK.
BP has a script policy for dividend re-investment. The share price for this dividend is set on the price determination date. (IMO, there is vested interest to keep share prices high on that date to have a slightly lower payout in shares). FYI: The date for the current dividend is May 14th, 2015.
Short term trade would be sell shares on that date. Since this date is after the ex-dividend, you will still collect the quarter's dividend. Wait about 30 days and buy back (usually at a lower price). Repeat for the subsequent quarters. To avoid tax consequences, this should only be done in retirement accounts (IRA, 401K, etc)
My guess is either June 18th or June 19th. (Basing this on the last 4 dividend announcement).
Expecting dividend to stay at 0.16.
Hoping for some better news in the next earnings announcement (company stock buyback in the current quarter, bv stabilization, improving affo, etc.)
FYI: The last time RSO had a BV increase, it was 3rd quarter of 2013 when BV increased from 5.55 to 5.56. AFFO was 0.24 (rare time where 0.2 dividend was covered) The stock price was about 50% higher than the current price and trading above BV.
RSO went from trading above BV to below BV due to declining bv and affo.
Q1 '14 BV=5.28, AFFO=0.20
Q2 '14 BV=5.24, AFFO=0.19
Q3 '14 BV=5.21 AFFO = 0.18
Q4 '14 BV=5.07 AFFO = 0.17
Q1 '15 BV=5.00, AFFO = 0.16
IF mgmt can increase bv and affo, RSO should go from trading below BV to maybe above BV.