BP

displaced dub

Hi All

Looking for a bit of advice about the BP oil disaster in the states.

I currently hold some BP shares which have been doing nicely for me but have lost approx 12% over the last few days.

Should i off load them on Monday/Tuesday, im just thinking of the clean up bill and fine they are going to have to pay which i think will have a further negative impact on the SP and earnings.

Any advice guys?

pocketdooz

displaced dub wrote: »

Hi All

Looking for a bit of advice about the BP oil disaster in the states.

I currently hold some BP shares which have been doing nicely for me but have lost approx 12% over the last few days.

Should i off load them on Monday/Tuesday, im just thinking of the clean up bill and fine they are going to have to pay which i think will have a further negative impact on the SP and earnings.

Any advice guys?

There's no good side to this story - looks like the slick will hit the Louisiana coast soon and BP will be subject to very bad headlines over the weekend.

Personally I'd be inclined to sell - I would think about it this way:

This is very bad news and I see no real upside for BP in next couple of weeks. If it turns out to be very very bad the stock will trade down and you can use your sale proceeds to but back in when you have a clearer picture. If it turns out to be contained and not as bad as it first seems, then it isnt likely to trade anywhere up really until then and at that point you can buy back in again when things are clearer.

Too much uncertainty now - I'd be happy to sell out and park the cash or invest elsewhere until this clears up a little.

displaced dub

pocketdooz wrote: »

There's no good side to this story - looks like the slick will hit the Louisiana coast soon and BP will be subject to very bad headlines over the weekend.

Personally I'd be inclined to sell - I would think about it this way:

This is very bad news and I see no real upside for BP in next couple of weeks. If it turns out to be very very bad the stock will trade down and you can use your sale proceeds to but back in when you have a clearer picture. If it turns out to be contained and not as bad as it first seems, then it isnt likely to trade anywhere up really until then and at that point you can buy back in again when things are clearer.

Too much uncertainty now - I'd be happy to sell out and park the cash or invest elsewhere until this clears up a little.

Cheers PD, looks like I will sell out as soon as I can as there is now 3 states declaring a state of emergency which is going to cost BP an awful lot of money not to mention reputation damage.

Goes to show how unstable deep sea drilling really is and on a personal side it's a shame so much wildlife will die not to mention the disastrous consequences for the local economy in those states.

glanman

obama said on tv tonight that BP will have the final bill. that could be huge but maybe some light can be shed on this by someone more knowledgeable...

Smcgie

This Might change your mind DD.

http://insider.thomsonreuters.com/link.html?ctype=group_channel&chid=3&cid=96973&shareToken=MTk0NjBiNjAtNmFmOS0wMTJiLWRmOTctMDAxZjI5MGEwYzk2OjA4NjlmZWM0%0ALWY5ZjAtNDQ0Ni1hNDVjLTI1NWY0MWZjOTJiNg%3D%3D%0A

Good Video about now being a possible buying opportunity and the market has already priced in the oil cleanup costs and BP damages etc.

glanman

but can they price in something that they dont know the total extent of??

woodseb

glanman wrote: »

but can they price in something that they dont know the total extent of??

that's why BP is off around 8% - the uncertainty of how much it is all going to cost - the market hates uncertainty

what you can do, is look at how much it it has fallen and what that implies in real money - i've seen some numbers like the fall in recent days is discounting a loss of about $20bln - i think that's probably a bit overdone and the stock could be a scoop at these levels

heno55

do they not have insurance for such an accident and if so isnt the sp drop a bit overdone

Bullish

Apperantly BP are self insured ! so no book passing

CNBC reporting 14 Billion for bill to clean up.

woodseb

Bullish wrote: »

Apperantly BP are self insured ! so no book passing

CNBC reporting 14 Billion for bill to clean up.

14bln looks to be at the high end of estimates alright, the figure mentioned in that report estimated clean up costs of between $1-7bln which highlights the uncertainty. BP won't be on the hook for all of the fine though as it had other partners in the project, the real risk could be related to it being shut out of other deepwater projects in the future which could be very costly

displaced dub

pocketdooz wrote: »

There's no good side to this story - looks like the slick will hit the Louisiana coast soon and BP will be subject to very bad headlines over the weekend.

Personally I'd be inclined to sell - I would think about it this way:

This is very bad news and I see no real upside for BP in next couple of weeks. If it turns out to be very very bad the stock will trade down and you can use your sale proceeds to but back in when you have a clearer picture. If it turns out to be contained and not as bad as it first seems, then it isnt likely to trade anywhere up really until then and at that point you can buy back in again when things are clearer.

Too much uncertainty now - I'd be happy to sell out and park the cash or invest elsewhere until this clears up a little.

Jesus im sorry i didnt take this advice, really really sorry.

Still its a good time for some of ye to make some money off this, the only upside for me is the Divi is pretty good still.

What a fuc*up

strmin

BP might not have any cash left to pay dividend.

heno55

for fecks sake dont take all the jam out of his doughnut:D

pocketdooz

This is a quick technical update from PFC ENERGY engineers watching the video feed:

Sawing operations to remove the top of the old LMRP were suspended last night at about 11pm. Currently, the diamond wire saw (much like a band saw, mounted horizontally) appears to be stuck after cutting 10-12 inches into the LMRP. The procedure is very tricky:

• Gas exiting the new cut is blasting into the saw, forming sizeable hydrate deposits on the sawing assembly
• Gas exiting the new cut is greatly reducing visibility
• The remains of the riser, above the cut site, is unstable, possibly pinching the saw wire into the cut
• The cut may be pinched on the drillpipe inside the riser

At present a massive set of shears is being deployed, possibly to remove more of the riser. Overall, this procedure is going very poorly, and BP's options are very limited. If this procedure fails, neither of the LMRP containment caps can be deployed, and the flow of oil into the Gulf will continue unabated.

displaced dub

Thanks pocket I sold out yesterday, when you look at the volumes traded over the last 2 days it's quite staggering, 320 million shares. I'm sorry I didn't take your advice earlier, really sorry.

I listened to BPs ceo at various times since the leak started so that's why I held on as when someone says a 70% chance of the fix working I like those odds. Seems like he was talking through his hole.

Also some analyst this am was saying that the next divi payment would go ahead as normal but after that it's anyone guess as to when the next payment will be will do the SP no favours. Currently an 8% yield.

Still I will have another look at BP in august when the leak stops, if it stops.

gonedrinking

Is now a good time to get back into BP?

Comordha

No, 2 months ago was.

displaced dub

gonedrinking wrote: »

Is now a good time to get back into BP?

Got back in at 3.40

Mr_Roger_Bongos

gonedrinking wrote: »

Is now a good time to get back into BP?

This all depends on your investment horizon.

Have a look at the 5 year chart for BP.

BP announced their asset sale strategy prior to the oilspill and continue to streamline the business and shore up their balance sheet.

I believe memories will fade, settlements will be paid and BP will return to paying respectable dividends.

Consider the current price of oil for BP's future earnings potential. Looking at the 5 year price of crude, the fact the stuff's running out and that were in a recession, if things pick up i can see price rising which should translate to increased profits.

The oil spill was a terrible natural disaster and I believe BP had a laissez faire attitude to safety with it's contractors. However, from an investment perspective it represents a great opportunity imo to invest in a top global company at a still discount price (i bought at 385).

gonedrinking

Mr_Roger_Bongos wrote: »

This all depends on your investment horizon.

Have a look at the 5 year chart for BP.

BP announced their asset sale strategy prior to the oilspill and continue to streamline the business and shore up their balance sheet.

I believe memories will fade, settlements will be paid and BP will return to paying respectable dividends.

Consider the current price of oil for BP's future earnings potential. Looking at the 5 year price of crude, the fact the stuff's running out and that were in a recession, if things pick up i can see price rising which should translate to increased profits.

The oil spill was a terrible natural disaster and I believe BP had a laissez faire attitude to safety with it's contractors. However, from an investment perspective it represents a great opportunity imo to invest in a top global company at a still discount price (i bought at 385).

My investment horizon would be about 10 years. The disaster is a positive in that they will make sure it doesn't happen again, however surely selling assets is a negative thing, in that they wouldn't of been holding those assets if they didn't have a good investment return? Or maybe I'm being too simplistic here.

displaced dub

gonedrinking wrote: »

My investment horizon would be about 10 years. The disaster is a positive in that they will make sure it doesn't happen again, however surely selling assets is a negative thing, in that they wouldn't of been holding those assets if they didn't have a good investment return? Or maybe I'm being too simplistic here.

The asset disposal is to fund the fine/clean up/Litigation mess thats to come.

displaced dub

displaced dub wrote: »

Got back in at 3.40

this has been a nice little earner for me over the last few months, hard to think they are 50p shy of where they where pre-deepwater horizion.

only bummer is the strenght of the euro, need it to weeken a bit for both my UK and US based stocks.

Mr_Roger_Bongos

displaced dub wrote: »

only bummer is the strenght of the euro, need it to weeken a bit for both my UK and US based stocks.

I really believe the euro will be under serious pressure this year but im slightly confused as to why it's still so strong. Perhaps it's a reflection of how poor the competition are (GBP and USD).

The EUR/GBP rate seems to have stayed within in 0.83-0.89 range for quite some time. Would you be happy enough to get back out at 0.83?

I intend to keep these shares for the foreseeable future.

woodseb

displaced dub wrote: »

this has been a nice little earner for me over the last few months, hard to think they are 50p shy of where they where pre-deepwater horizion.

eh? BP was trading at 650p pre-accident and is at 490p now - you've also missed a dividend yield for the past quarters

still a good profit mind.

Raskolnikov

displaced dub wrote: »

this has been a nice little earner for me over the last few months, hard to think they are 50p shy of where they where pre-deepwater horizion.

only bummer is the strenght of the euro, need it to weeken a bit for both my UK and US based stocks.

Hopefully there's a lesson in there for you displaced!

You can be buying real companies with profits and make money in the here and now; as opposed to "long-term" Irish bank investors who have lost a fortune.

displaced dub

woodseb wrote: »

eh? BP was trading at 650p pre-accident and is at 490p now - you've also missed a dividend yield for the past quarters

still a good profit mind.

Thats correct, i had 5.50 in my head, anyway up nicely now, tagging on another couple of percent today.

displaced dub

Raskolnikov wrote: »

Hopefully there's a lesson in there for you displaced!

You can be buying real companies with profits and make money in the here and now; as opposed to "long-term" Irish bank investors who have lost a fortune.

im pretty allergic to irish banks, once bitten and all that. up 6K last year on my overall porfolio of BP,Smurfit, Ryanair, Amazon, Apple and BskyB... Need the euro to weeken a bit especially against the dollar.