Shell buying BG Group...

[Dr. Wu]

Now thats what I call ringing the bell at the bottom....

[Palm]

Interesting Doc. That'll put some ripples in the pond

http://www.wsj.com/articles/shell-in-tal...1428437955

[Getitrt2]

I believe that is the Company our Chairman Finlayson was CEO of at one time.

[Putncalls]

I guess Shell buying IOC would be like Donald Trump buying a time share for rental income.

[Tusker]

Note from Bloomberg that RDS reserves declined last two of three years.

BG Gas reserves grew last six of seven years.

It's not nice to have a falling RRR.

It is very nice to have a partner who can move the needle up on RRR.

:-)

[Stavros]

HEADLINE: "New BG boss hires M&A specialist from Statoil weeks after taking helm"

- - - HA! - - - IOC also has lots of new M&A folks. Perhaps they're actively engineering an acquisition of IOC?? I hope it happens AFTER Chandler sells all the rest of his shares at $45. We need to be rid of him as a shareholder ASAP without him benefitting from a PPS increase.

Reuters March 30, 2015
By Ron Bousso

http://finance.yahoo.com/news/bg-boss-hi...wRzZWMDc2M-

LONDON (Reuters) - BG Group's (BG.L) new boss Helge Lund has poached two officials from his former company Statoil (STL.OL) for key management positions, sending a clear sign he intends to act quickly to try to turn around the British firm amid a sharp oil price drop.

The appointments of Katie Jackson as vice president for BG global strategy and business development and of Tom Melbye Eide as BG head of general council were announced in an internal company memo last week.

Jackson had previously been responsible for mergers and acquisitions at Statoil under Lund's leadership.

A BG spokesman confirmed the appointments on Monday. They do not require a regulatory announcement.

Lund, who took over officially on Feb. 9 and is BG's third chief executive in as many years, must steer the embattled company through the low global oil price, production difficulties in Egypt and new projects in Australia and Brazil.

"He is not wasting any time and is sending the market a clear signal that he is ready to tackle the problems facing BG," said one industry source.

Jackson will play a central role in carrying out a new company strategy that Lund is expected to unveil later this year, industry sources said.

Jackson previously worked for Anadarko (APC.N) and Royal Dutch Shell (RDSa.L).

Eide replaces Graham Vinter who is retiring. Eide worked for eight years at Statoil before joining privately-run Norwegian aluminium products group SAPA in 2013.

Lund, who turned Statoil around during his 10 years at its helm, started his new job a month earlier than initially planned after BG wrote down $6 billion (4 billion pounds) to reflect the fall in value of its oil and gas assets.

BG has been reviewing its portfolio for more than a year as it looks to reduce costs. Analysts are eyeing parts of its LNG business, particularly in Tanzania, to go on the chopping block, along with a 50 percent stake in BG's Queensland Curtis LNG export plant, which could fetch $5-10 billion.


====> Shell is struggling to reverse years of slumping output from its wells. Its worldwide production dropped to the equivalent of 3.08 million barrels a day in 2014, the lowest in at least 17 years. Reserves, a metric that investors watch to assess future growth prospects, have declined in two of the past three years.

In contrast, BG boosted reserves in six of the past seven years. Its reserves were 78 percent gas as of Dec. 31, compared with 47 percent for Shell.

[Tree]

Now thats what I call ringing the bell at the bottom....

Ding Ding Ding

SM's like sure things.

Reserves.

Long-life assets.

Imminent free cash flow.

Meeting the burdensome dividend obligation.

Even crap Aussie LNG ROI is irresistable.

**********

Shell’s acquisition of UK major BG Group will be “an absolutely formidable fit”, the former’s chief executive has said, while admitting the Anglo-Dutch supermajor had also looked at other potential targets.

The combination is though set to see exploration spending slashed, while Shell is also left needing to source $20 billion in funding to push the deal through.

Shell made a £47 billion ($69.7 billion) cash-plus-shares offer for BG as it looks in particular to deepen its exposure to deep-water and liquefied natural gas plays, with Brazil and Australia two key focus areas.

“We have been working on this for some months,” Shell chief executive Ben van Beurden told investors and analysts on a call on Wednesday morning.

Van Beurden also admitted that the supermajor had eyed “BG and other companies for a long period of time”, without identifying any of the other potential targets.

“I have been an admirer of BG since my LNG days,” he added. “This is putting strength together with strength and making something better out of it.”

Van Beurden said the combination will create a newer portfolio, with growing positions and long-life assets. But much of the appeal of BG was in its LNG assets and its upstream position in Brazil.

“Brazil is an absolutely outstanding upstream province,” the Shell boss said, pointing out that his company is already a partner in the giant Libra pre-salt field.

“You have to look at Brazil for the potential that it holds. This at the moment is the most exciting part in the industry. The potential is absolutely gigantic - there is much more to come. And if you then look at how we have been exposed to it, I can only conclude that at Shell we are insufficiently exposed to the Brazil opportunity.”

Shell is set to add significantly to its LNG portfolio in Australia in particular, where it already has the giant Gorgon and Prelude projects to add to BG’s Queensland Curtis LNG.

BG has also participated in major gas discoveries off Tanzania in East Africa where it is developing an LNG project together with Statoil.

Exploration spending will be cut, however, with chief financial officer Simon Henry seeing it dropping to below $35 billion from a combined $42 billion to $43 billion this year.

Henry also said Shell will require $20 billion in financing this year to get the deal through, and this is on top of any other financing requirements, which will most likely be needed in a weak oil price environment.

Analyst Neill Morton of Investec said in a note that “Shell is pouncing on BG’s imminent free cash flow to protect its burdensome dividend payout”.

BG is set to start generating sales revenue shortly from QCLNG after it was brought on stream in December, while also ramping up output from two floating production projects off Brazil that were also kicked off last year.

The analyst said BG investors had received “what we see as a compelling offer”, though added the merits of the deal were less convincing for Shell’s shareholders.

He added the proposed transaction was predicated on Shell’s projection of an oil price recovery to $90 a barrel by 2018, with the company aiming to generate $55 billion to $70 billion of cash flow by 2020 when it expects prices of $95 a barrel.

Another analyst, Teodor Sveen Nilsen of Swedbank, opined that the pending takeover could set the stage for similar deals and “will most likely intensify merger & acquisition speculation”.

“Shell’s acquisition may mark the first deal in a row of well capitalised E&Ps that use the weak oil market to strengthen their asset portfolios,” he said.

Nilsen added it shows players are willing to pay a significant premium to stockmarket valuations for oil and gas assets and “represents by far the largest E&P deal in Europe over the past few years”.

[admin]

So which of the oil giants could be looking for prey? Bowman said it’s probably too soon for Shell to go shopping again, but noted there’s already speculation that some of its rivals may be on the lookout for a good deal. Total SA FP, TOT,  and Statoil ASA STL, are among the major oil companies in Europe, while Chevron Corp. CVX, -0.08%  and Exxon Mobil Corp. XOM,  are Shell rivals in the U.S.

Who’s the next target for oil M&A after the Shell-BG deal? - MarketWatch

[Palm]

Will be interesting to see whether Shell's offer is the last and best.

[Getitrt2]

I guess Shell buying IOC would be like Donald Trump buying a time share for rental income.

I don't think so.  They are very interested in LNG assets and growth, especially in relation to Australia, where Shell and BG are already located, and Asian demand for it.  They would be buying major interests in a low cost planned LNG project for Asia and probably the most prospective under-developed gas basin remaining in the world, perfectly located for that.

It is difficult to understand how little some shareholders, and certainly not just Putn, seem to appreciate the value and potential of what they own, and how negatively they comment on it at times, I guess because of frustration with past delays, volatility, and manipulation, which I have certainly shared in and very much felt.  I think we should be focusing now, however, on the solid progress and momentum and what is almost certainly a much, much brighter future.