British Petroleum
Oil shares fully deserve their recovery but whether BP, up 10s. or so in recent weeks, has been carried up too far by North Sea gas is a moot point. The announcement that a price of 5d. per therm has been agreed for the first 50 million cubic feet a day for North Sea gas, rising to 100 million cubic feet in the first three years, Is a 'bull' point, the price allowing a fair profit, but this will only add about £4 million to the gross resenues of BP which last year exceeded £800 million. BP has, however, announced that its trading profit in the last half-year was higher and that it will pay the same dividend for 1965, so that even at a price of 70s. the yield is 5.7 Per cent. For the first time BP is now yielding less than SHELL TRANSPORT, which at 40s. 6d. returns 6.2 per cent, assuming as we can that the 1965 dividend is maintained at the 1964 rate. Both Burmah Oil and the Treasury have declared that they will be taking up their BP rights (1-for-13 at 511,.1 so that the public will have to subscribe only about £15 million. These rights will be dealt in en February 28. As the Government owns 162 million ordinary shares and will subscribe £31.1 million, -while Burmah Oil own 76 million and will subscribe £15 million, BP is in an extremely favourable position to raise risk capital. Its im- Proved status in the. oil world • is now. more generally recognised on the market.
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