Shell wants out?, page-3

I wouldn't dismiss this so easily. It tells us and infers a lot.

1. Shell is a oil major whose earnings have plunged 72%
2. Low oil prices continue to put significant pressure on the sector.
3. Shell's debt pile is growing rapidly (as is WPL's who didn't have enough cash to bid for oil search and have borrowed to pay dividends)
4. Shell is relying on asset disposals to pay bills (17 major sales planned in the next 6-12 months)
5. Brent has continued it's decline from $52.28 on June 09 to $43.05 as of July 29. A -17.65% decline at a time when it traditionally continues to rise until late August. This doesn't bode well for the future and implies much lower prices by year end.

Therefore, Shell dumping assets does not inspire confidence in the immediate future for a rebound in oil prices - quite the opposite. One might ask why has it taken so long? It is simply because the brunt of the decline has not yet been felt hard enough to bring the market back into balance. WPL has been cautious with acquisitions and rightly so and should be picking up cheap assets while it can but there is no hurry. WPL will need to balance debt vs acquisitions and low pricing for a sustained period or they will end up like Shell.