BHP Group: Moves counter-cyclically

By Adrian Prendergast

28 October 2020, 12:00 AM

BHP is acquiring an increased stake in Shenzi in Gulf of Mexico for US$505m. Adds 52mmboe of reserve (2P+2C) and ~11kboepd to production. Hess needed to divest the stake to fund development elsewhere, with earnings depressed. BHP is taking advantage of the cycle with an opportunistic value accretive bolt-on acquisition, taking its interest in Shenzi to 72%. We maintain our Hold rating with a revised target price (login to view target price).  Opp...

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Oil and Gas: A plan to have a plan

By Adrian Prendergast

22 September 2020, 9:25 AM

We see the oil & gas sector as a Covid-exit trade that has so far been overlooked. Given market jitters around energy, we expect a broad sector re-rating to trail some other key Covid trades. This has left us favouring those oil & gas players with defendable (low risk) earnings platforms and healthy balance sheets.

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Rio Tinto – Iron ore drives first half

By Adrian Prendergast

30 July 2020, 9:00 AM

1H20 result was ahead of consensus estimates, with ongoing iron ore strength helping Rio Tinto (ASX:RIO) to plug a gap left by lower aluminium and copper prices. We downgrade to a Hold rating on recent share price strength, while still considering RIO a core holding for a wide group of investor types.

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