An Opec meeting on December 5 could send oil price even lower and sound the ‘death knell’ for the deal.
‘If oil prices remain at these deeply depressed levels, then it could bring nothing but disaster. The famous Shell dividend could be cut, investors will be diluted and the shares would become a riskier prospect,’ writes John Ficenec in the Sunday Telegraph.
He argues that while the deal makes sense on paper – as it bolsters Shell’s prospects in the dash for gas – the success rests on one factor ‘price’.
The price here is not right, says Questor, and there is a risk that Shell is overpaying at £47 billion.
Shell will fund the deal with 30 per cent cash and 70 per cent new Shell shares – that means selling some $30 billion (£19 billion) of assets during the three years from 2016 and a £25 billion share buy-back from 2017 to reverse dilution effects.
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