Music to My Greedy Little Ears
Category: Economy & Business... Oil & Gas...
Posted Monday, March 29, 2004 at 04:30 PM [GMT-6]

BP PLC, the company with which I have an ongoing love/hate relationship, announced today its intention to continue its share buyback program for the next three years, provided the oil price stays above $20/barrel. In fact, it says that it is entering into a period where it will focus on delivering production growth and increasing the value of its stock. This marks a change from the previous several years where the focus was on making acquisitions of both companies and properties.

The market reacted to BP's announcement with a 2% jump in its stock price. From a purely personal perspective, that puts another ten grand into our 401Ks, and while that represents only imaginary wealth at this point, it's still better than many of the possible alternatives.

When BP acquired my long-time employer, ARCO, the managements of both companies assured us that BP was a $60/share company. However, it promptly became a low-40s company, and even a mid-30s company. In the three years since the takeover, we haven't sniffed $60.

Lately, the stock has settled in around $50, and the program announced today may just be the boost needed to put it back into that $60 promised land. Will I keep my vow to sell out if it gets there? Beats me. It will probably depend on whether there's anything better to shift the money into; frankly, BP seems to be pretty well positioned for long-term success.* If the Fed still has interest rates in the under-2% range, I may just keep riding that limey horse a bit longer.