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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Jacob Snyder who wrote (141603)	11/15/2010 4:05:55 PM
From: Jacob Snyder	Read Replies (2) of 206334

Big Oil Urged To Boost Value By Mimicking BP's Asset Sell-Off: 11/15 WSJ online.wsj.com BP PLC (BP) said Monday it agreed to sell its fuel marketing business in several African countries for $296 million, completing the latest in a $14 billion string of deals that promises to reshape the company while raising needed funds. Although BP was forced into this action to cover the cost of the huge Gulf of Mexico oil spill this summer, it has sold at high prices in what is increasingly a seller's market. Some analysts and investors are urging other companies to follow BP's lead and release trapped value by slimming down and refocusing on core areas... Most major oil companies optimize their huge portfolios by buying and selling assets every year, but few have attempted something on the scale of BP's plan to sell $30 billion by the end of next year, shrinking the company's oil and gas output by around 10%. So everyone has been paying attention, particularly once BP started getting good prices. For example, in July BP sold some natural gas assets in North America and Egypt to Apache Corp. (APA) for $7 billion. However, the value of these assets implied by BP's market value at the time was $3 billion, meaning the company made a quick gain of $4 billion, analysts at Barclays Capital said in a research note... my comment: If 10% of output is worth 30B$, that implies 100% of output should be worth (very approximately) 300B$. BP's market cap today is 135B$.

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