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Shell Makes Cuts to Boost Returns

Allen Good7 December, 2016

With the BG acquisition in the books, Shell (RDSB) is embarking on the necessary steps to compete in a world of $60 a barrel oil.

Like the rest of the integrated group, Shell is working to reduce its cost base, which has become bloated during the past five years, by reducing headcount and improving its supply chain.

The integration of BG is integral to Shell’s efforts, as it holds the potential for $4.5 billion of cost-reduction synergies. Furthermore, the addition of BG’s low-cost production reduces Shell’s per-barrel operating cost, which ranked among the highest in its peer group. In total, Shell aims to reduce operating cost by 20% from 2014 levels by the end of 2016, with further reductions possible in later years.

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Shell in talks to sell gas field offshore Ireland

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screen-shot-2016-11-09-at-20-26-36Written by Erikka Askeland – 05/12/2016 7:23 am

Shell is reported to be in talks to sells its stake in an Irish gas field to an Australian infrastructure fund.

Macquarie is understood to have approached the oil and gas giant over its 45% stake in Corrib, valuing it at around £1billion.

If a deal is struck, the sale will be part of Shell’s plan to offload $30billion of assets in the wake of its mega-merger with BG Group earlier this year.

It is uncertain what would happen to the operatorship of the field which started pumping gas at the end of last year. Other stakeholders in the field include Statoil and Canada’s Vermillion Energy.

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Shell in talks over Gabon sale as seeks to hit divestment target

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By Ron Bousso | LONDON

Royal Dutch Shell is in advanced talks with a party interested in buying its onshore operations in Gabon as part of a $30 billion divestment plan following its purchase of BG Group, which was completed in February..

Shell had informed its staff of the discussions on Thursday, a spokesman for the firm told Reuters on Friday.

The oil and gas group, which plans to exit operations in 5 to 10 countries, has made relatively slow progress in its divestments as uncertainty over oil’s outlook has dampened buyer enthusiasm for deals at the prices it is targeting. So far this year, Shell has sold or agreed to sell around $6 billion of assets.

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Shell Considering Dumping Its Iraqi Oil Fields

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By Julianne Geiger – Nov 28, 2016, 2:24 PM CST

Royal Dutch Shell is considering exiting its positions in Iraqi oil fields, according to industry sources cited by Reuters.

Shell, which declined to comment, is the world’s top liquefied natural gas producer, and is only exiting its oil field assets in Iraq, not its gas field assets. Iraq accounted for 4.4 percent of Shell’s total oil and gas production in 2015.

The fields in question are the Majnoon field, in which Shell holds a 45 percent interest, and the West Qurna field. Majnoon produces an average of 200,000 barrels per day, according to Shell’s website.

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Shell CEO expects no valuation hit from climate accord

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Royal Dutch Shell expects to pump out all the fossil fuel reserves listed on its balance sheet, its chief executive said, dismissing concerns that production limits in the wake of the Paris climate accord could hit the energy giant’s valuation.

In an interview with Dutch newspaper Het Financieele Dagblad, Ben van Beurden said the issue of “stranded” reserves – deposits in the ground that cannot be used because of carbon emissions limitations – would have no impact on balance sheets.

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Kazakh President Says Partners in Shell Oil Field Face Tax Claim

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Nariman Gizitdinov and Torrey Clark: November 24, 2016 — 6:42 AM EST

Kazakhstan’s authorities are looking at whether the Karachaganak oil and gas venture, which includes Royal Dutch Shell Plc and Eni SpA, has unpaid taxes.

“The tax authorities have tax issues — they didn’t pay,” President Nursultan Nazarbayev said in an interview on Tuesday in Astana, without elaborating. He also confirmed the government is now seeking to change how revenue from the field is shared with the companies, which is allowed by the terms of the contract.

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Minnow set to seal Shell deal

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Danny Fortson: November 20 2016, 12:01am

A small, private oil company is nearing a deal to buy nearly $2bn (£1.6bn) worth of Shell’s North Sea oil fields.

Chrysaor was one of several suitors to have lodged bids for the assets that the FTSE 100 giant put on the block after its blockbuster takeover of rival BG.

It is understood that the company, which is run by former Amerada Hess executive Phil Kirk and chaired by Francis Gugen, founder of beleaguered shale gas developer iGas, is closing in on a deal. Chrysaor is likely to buy most, but perhaps not all of the North Sea fields Shell is hoping to unload, according to industry sources.

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Shell’s debts rise as it misses asset-sales target

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PUBLISHED NOV 19, 2016, 5:00 AM SGT

LONDON • Royal Dutch Shell is more than US$4 billion (S$5.71 billion) short of its asset-sales target for the year, prompting credit ratings agencies to warn that its record debt will not start shrinking soon enough.

Shell piled up borrowings following its biggest acquisition, the purchase of BG Group, and needs to hit disposal targets to help pay for it and stave off rating reviews, according to the agencies. The company sold US$1.7 billion of assets in the first nine months of this year, according to a Nov 1 statement, well short of its US$6 billion to US$8 billion guidance.

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How Royal Dutch Shell plc Has Changed in the Past Three Years

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SHELL EMPLOYEE AT WORK. IMAGE SOURCE: ROYAL DUTCH SHELL.  

By Reuben Gregg Brewer (ReubenGBrewer: Nov 17, 2016

Royal Dutch Shell plc (NYSE:RDS-A) (NYSE:RDS-B) is one of a small collection of international energy giants. That group, which includes companies like ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX), as a whole, is thought of as oil companies. But over the past few years, Royal Dutch Shell has taken steps to tip the balance toward natural gas, a key difference investors need to know about.

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BvB has truly lost the plot

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It is amazing that these “difficult choices” are all falling at the door of the lowest paid employees of Shell and yet the vastly inefficient and “fat” middle and upper level management just seems to keep on expanding.

With such low activity levels due to the transition away from oil and gas, low oil price and smaller geographic focus of Shell one would have thought that these highly paid meeting organisers would face the chop rather than the people doing actual work.

It is sad to say but it seems BvB has truly lost the plot after such a promising start and now tries to dig himself out of his own hubris after so many poor choices prime of which is the overpaying for BG.

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Shell Tops Ranks Of Ideal Oil, Gas Employers

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By Irina Slav – Nov 15, 2016, 10:10 AM CST

Shell has emerged as the number-one employer in the energy industry, according to a Rigzone survey among 8,400 respondents in more than 100 countries. This is the first survey of this kind since the start of the price slump.

The top 10 of the best employers in the industry, according to the survey, is occupied by Big Oil and Big Oilfield Service, with Chevron at #2, Exxon at #3, and BP at #4. Halliburton was fifth, followed by Schlumberger, Aramco, Total, Baker Hughes, and Weatherford International at #10.

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Shell to axe 380 finance jobs in Glasgow in favour of cheaper offices overseas

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By Emily Gosden, energy editor: 16 NOVEMBER 2016 • 1:38PM

Royal Dutch Shell is to axe 380 jobs in Glasgow as it shuts its only UK finance operations office in favour of cheaper locations in Poland, India, South Africa, Malaysia and the Philippines.

The oil giant’s announcement that it plans to close its Bothwell Street office in the city as part of its cost-cutting drive brings the total number of jobs shed from its UK operations over the past 18 months to more than 1,350.

Staff in the Glasgow office, who undertake back-office administrative tasks such as processing invoices and managing travel and expenses, face “involuntary severance” as Shell moves their work to other offices in its “global Shell Business Operations network”.

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Shell vs BP: which oil giant should you buy?

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By James Connington14 NOVEMBER 2016 

In the hunt for income‑producing stocks, BP and Royal Dutch Shell are two obvious candidates.

Both have so far kept dividend promises made before the oil price crash, leading to hefty yields: 7pc for BP and 6.7pc at Shell. But which firm is better placed to sustain such attractive dividends?

At first glance, it can look like splitting hairs. Each is prioritising dividend payments, although there is little chance of dividend growth.

Both have taken significant action to cut costs and sell assets in response to the lower oil price.

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Shell share price: Group mulls sale of Norway oilfields

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screen-shot-2016-11-09-at-20-26-36by Tsveta ZikolovaMonday, 14 Nov 2016, 10:36 GMT

Royal Dutch Shell (LON:RDSA) is considering a sale of part or all of its $3-billion Norwegian business, The Sunday Times has revealed. The disposal would come with the Anglo-Dutch oil giant looking to pay down debt amid growing investor pressure, following the acquisition of former smaller London-listed rival BG Group.

Shell’s share price has been little changed in London this morning, having inched 0.28 percent higher to 1,954.50p as of 10:08 GMT. The stock, however, is underperforming the broader market rally, with the benchmark FTSE 100 index having soared 1.15 percent to stand at 6,807.63 points. The shares have added just under a fifth over the past year, and are up by some 28 percent in the year-to-date.

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Shell stand-off over New Zealand oil asset

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BRIDGET CARTER: Mergers & Acquisitions Editor, Sydney: @BridgetCarterNovember 14, 2016

Shell appears to be in a stand-off with Todd Energy over the future of its $1 billion-plus portfolio of oil exploration and production assets in New Zealand, according to sources.

Investment bank JPMorgan is understood to be working for the energy company, although no formal process has yet been launched, according to sources, despite suggestions that documents would start being sent out around August.

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Shell to sell off Norway oilfields

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screen-shot-2016-10-20-at-23-00-27Shell has lined up the investment bank Rothschild to conduct a review of its $3bn Norwegian division: MATS ANDA/GETTY IMAGES

Danny Fortson: November 13 2016,

Shell is considering a sale of part or all of its $3bn Norwegian business as Britain’s biggest company comes under growing investor pressure to pay down debt from its blockbuster takeover of rival BG.

The oil titan has lined up the investment bank Rothschild to conduct a review of the division, which operates several large fields in the Norwegian North Sea and has smaller stakes in many others.

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LIVING IN TRUMPWORLD

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Comment from Bill Campbell on the Energy Voice Article: Shell stresses importance of stable regulatory environment post-Trump victory

Under Trump, with the senate and congress to support him, we can look forward soon to significant deregulation in the US effecting positively onshore fracking, tar sands development, offshore Deepwater in the Gulf and a boost perhaps to Alaska drilling. One assumes the Keystone pipeline will go ahead and perhaps pipelines running from central US to East Coast for new LNG Plants to supply a Europe hedging its bets over Russian gas availability with Europe’s ongoing problems with Putin, sanctions etc. A significant increase in US output, leading to increase in global supply over demand could dampen oil price. Shell seems to have divested assets recently in the US in some of these areas to offset BG takeover costs so uncertain whether Trumpworld will be good or bad for Shell.

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Shell to invest $10 billion as Brazil expands private role in oil industry

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screen-shot-2016-11-09-at-19-58-01Royal Dutch Shell Plc (RDSa.L) will invest $10 billion (8 billion pounds) in Brazil over five years now that the country has increased opportunities for foreign companies in its oil industry, its chief executive officer said on Thursday.

Already the largest foreign investor in Brazil, Shell is particularly encouraged by recent legislation that increases the role of private oil companies in the tapping of vast off-shore oil deposits in the subsalt layer, Chief Executive Officer Ben van Beurden said.

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Royal Dutch Shell: The Comeback Is Here

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Alpha Investor: Sunday Nov 6, 2016

Summary

  • Shell posted a massive turnaround in its bottom line last quarter on the back of an improved production profile, lower costs, and higher price realizations.
  • Shell’s financial improvement is set to continue going forward as upstream oil price realizations will continue to improve on the back of a positive demand-supply environment in the oil industry.
  • Oil demand has exceeded supply by 500,000 bpd this year and the trend will continue as the likes of Russia, Saudi Arabia, and the U.S. continue to reduce output.
  • Shell’s focus on lowering both operating and capital costs will allow it to attain break-even point even if oil prices remain at $50/barrel, which will also improve cash flow.

On Tuesday last week, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) reported impressive results for the third quarter. In fact, Shell was able to achieve a major turnaround in its bottom line performance, posting a profit of $1.4 billion as compared to a huge loss of $6.1 billion in the same quarter last year. This impressive turnaround in Shell’s bottom line was a result of an increase in production as compared to the prior-year period, driven by the acquisition of BG that led to a favorable production mix in the upstream segment.

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Hold the champagne

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screen-shot-2016-11-03-at-14-50-16By Ed Crooks, November 4, 2016

If you are looking forward to the oil industry recovery, you shouldn’t break out the champagne just yet.

Over the past eight days, the world’s largest listed oil companies have released third quarter earnings reports. From all of them, the message was that while the worst might be over, they were still facing a long hard road ahead.

The snap reactions from the stock market were mixed: positive for  ChevronRoyal Dutch ShellTotal and ConocoPhillips; negative for ExxonMobilBPEniStatoilPetrochina and Cnooc.

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Oil stand-off threatens dividends at BP and Shell amid fears that a deal to prop up prices is about to collapse

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By SABAH MEDDINGS FOR THE DAILY MAILPUBLISHED: 23:34, 1 November 2016 | UPDATED: 23:34, 1 November 2016

Dividends at BP and Shell are set to come under threat as fears grow that a deal to prop up oil prices is about to collapse.

The two oil giants yesterday reported better-than-expected results – and gave a boost to their millions of small shareholders by protecting payouts.

But they have only been able to keep their dividends after slashing billions of pounds in costs following a collapse in the oil price from $112 a barrel in 2014 to less than $30.

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Shell and BP tighten the belt over low oil prices with spending cuts

screen-shot-2016-11-02-at-11-05-51PUBLISHED: 07:22, Wed, Nov 2, 2016 | UPDATED: 07:41, Wed, Nov 2, 2016

The FTSE 100 rivals warned investors not to expect a big upturn next year as they plan for prices in the low $50s-per barrel compared with current rates of about $48 for Brent.

But their efforts to balance investment in future growth while battling tough trading conditions and rising debt met with contrasting reactions as Shell’s share price rallied 84p to 2199p while BP slumped 21¾p to 462p.

Shell, whose £35billion acquisition of BG Group made it the world’s top liquefied natural gas producer, boosted underlying net profit for the three months to the end of September by 18 per cent to $2.8billion, compared with analysts’ forecasts of $1.71billion.

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Shipping to become ‘major new sector’ for LNG: Shell

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by Angela Macdonald-Smith: 2 November 2016

Demand for LNG as a ship fuel has emerged as a much needed new source of growth in the oversupplied market, with oil giant Royal Dutch Shell giving a bullish assessment of the impact of tighter international rules on maritime emissions.

Shell’s head of integrated gas Maarten Wetselaar told investors in London that between shipping and trucking, the transport sector had become “a major new sector” for the LNG market.

The shipping market and the heavy trucking market together represent about 750 million tonnes of potential LNG demand, about three times the current global LNG supply, Mr Wetselaar said. He signalled that last week’s announcement of new rules on emissions from shipping had made Shell more positive on demand from the sector, noting it was an area where the competition was oil rather than cheap coal.

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Shell selling two assets in U.S. Permian basin: CFO

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Royal Dutch Shell is selling two small land packages in the U.S. Permian Basin but will also consider acquisitions in the oil-rich West Texas province, Chief Financial Officer Simon Henry said on Tuesday.

Shell, which is in the midst of a $30 billion disposal program to pay for its $54 billion acquisition of BG Group, will remain a key future engine of growth, Henry said on an analysts call.

“The Permian is the crown jewel. Not just in terms of value and quality of the asset but also the capability that is being developed there,” he said.

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BP And Shell Optimistic The Market Is Turning

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screen-shot-2016-11-01-at-16-01-19By Nick Cunningham – Nov 01, 2016, 6:23 PM CDT

BP and Royal Dutch Shell reported their latest financial figures for the third quarter and both companies showed some improvement, a sign that the oil markets are starting to find their footing.

A few days ago, some of the other oil majors released third quarter earnings, revealing the ongoing damage being done to the balance sheets of even the largest oil companies. But BP and Shell offered some reasons for optimism for the industry.

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Royal Dutch Shell’s Q3 Earnings: Good, but Not As Great As Some Have Declared

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Tyler Crowe: (TMFDirtyBird): Nov 1, 2016

It seems that now when an oil company’s earnings increase, financial pundits say it “rocketed” upwards or some other hyperbole like that. Sure, Royal Dutch Shell’s (NYSE:RDS-A) (NYSE:RDS-B) third-quarter results were better than the past few quarters thanks to the BG Group deal, but the devil’s in the details. Let’s take a look at the company’s results and why they improved, as well as peek into Shell’s near-term future as 2017 comes into focus. 

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No let-up for Royal Dutch Shell and BP amid oil price crash

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Taken together, the lesson of the past six months is that both UK-listed oil majors remain under intense pressure from weak oil prices but are making progress towards reshaping their businesses to cope with the slump.

Yet, the scale of the financial gamble was evident in the tripling of Shell’s net debt from a year ago to almost $78bn at the end September. This represented a debt-to-equity ratio of 29.2 per cent, close to the 30 per cent level which Shell has previously declared as the upper limit at which it was comfortable operating.

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Shell’s Record BG Deal Starts to Pay Off as Production Surges

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screen-shot-2016-11-01-at-16-01-19By Rakteem Katakey: November 1, 2016

Royal Dutch Shell Plc’s biggest takeover, the subject of intense investor scrutiny during crude’s collapse, is starting to pay off as Europe’s largest oil company chalks up its highest profit in five quarters.

The cash now generated by BG Group Plc — acquired by Shell for $54 billion in February — outstrips its spending, while production has risen by about a third in two years, Shell Chief Financial Officer Simon Henry said Tuesday. The integration of its assets has been completed “well ahead of time,” he said.

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Shell’s $78 Billion Escape Act

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screen-shot-2016-10-06-at-13-11-55By Chris HughesNov 1, 2016 8:38 AM EDT

Eight months on from the $64 billion acquisition of BG Group and Royal Dutch Shell PLC’s finances seem to be under greater strain than ever. The Anglo-Dutch oil major’s net borrowings stand at $78 billion and indebtedness is a smidgen below management’s self-imposed ceiling. Even as the benefits of buying BG are starting to show, the takeover has trapped Shell in austerity measures for the foreseeable future. The good news is that progress is likely to be visible, and that provides a useful story for the shares.

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Shell’s earnings beat Exxon as oil majors adapt to low prices

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By Ron Bousso and Karolin Schaps | LONDON

Royal Dutch/Shell and BP on Tuesday joined peers in reporting higher than expected earnings by making further deep cuts in spending to cope with an oil price downturn now in its third year.

Shell’s stocks rose by over 3 percent as it announced higher quarterly earnings than arch-rival U.S. Exxon Mobil, the world’s largest listed company by output. Anglo-Dutch Shell is hoping to outgrow Exxon over the next few years after acquiring rival BG for $54 billion earlier this year.

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Shell swings to a profit, outlook uncertain

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screen-shot-2016-10-20-at-23-00-27Nov. 1, 2016 4:30 AM ET|By: Yoel Minkoff, SA News Editor

“Shell delivered better results this quarter… but lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain,” Chief Executive Ben van Beurden said in a statement.

Earnings on a current cost of supplies basis reached $1.4B in Q3, after contracting $6.1B in the same period a year ago, as higher production from acquisition BG Group and lower operating costs helped support earnings.

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Royal Dutch Shell says 3Q earnings rose 18 percent

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By ASSOCIATED PRESS: 1 November 2016 

LONDON (AP) — Royal Dutch Shell says third-quarter earnings rose 18 percent, boosted by increased production after the acquisition of BG Group.

The company said Tuesday that profit adjusted for one-time items and the fluctuating value of inventories rose to $2.79 billion from $2.38 billion in the same period last year.

Gains from increased production more than offset falling oil prices. Oil and gas production rose 25 percent to the equivalent of 3.6 million barrels of oil a day. That includes 806,000 barrels a day from BG assets.

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Royal Dutch Shell Plc Third quarter 2016 summary of unaudited results

THE HAGUE, The Netherlands, Nov. 1, 2016 /PRNewswire:  Dutch Shell plc: 3rd Quarter 2016 Unaudited Results

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  • Royal Dutch Shell’s third quarter 2016 CCS earnings attributable to shareholders were $1.4 billion compared with a loss of $6.1 billion for the same quarter a year ago. 
  • Third quarter 2016 CCS earnings attributable to shareholders excluding identified items were $2.8 billion compared with $2.4 billion for the third quarter 2015, an increase of 18%. 
  • Compared with the third quarter 2015, CCS earnings attributable to shareholders excluding identified items benefited from increased production volumes mainly from BG assets, lower operating expenses more than offsetting the increase related to the consolidation of BG, and lower well write-offs. This was partly offset by the decline in oil, gas and LNG prices, and increased depreciation mainly resulting from the BG acquisition, and weaker refining industry conditions.
  • Third quarter 2016 basic CCS earnings per share excluding identified items decreased by 8% versus the third quarter 2015.
  • Cash flow from operating activities for the third quarter 2016 was $8.5 billion, which included favourable working capital movements of $0.7 billion.
  • Total dividends distributed to shareholders in the quarter were $3.8 billion, of which $1.1 billion were settled by issuing 44.1 million A shares under the Scrip Dividend Programme.
  • Gearing at the end of the third quarter 2016 was 29.2% versus 12.7% at the end of the third quarter 2015. This increase mainly reflects the impact of the acquisition of BG.
  • A third quarter 2016 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share (“ADS”).

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented:

“Shell delivered better results this quarter, reflecting strong operational and cost performance. But lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain.

Our investment plans and portfolio actions are focused firmly on reshaping Shell into a world-class investment case at all points in the oil-price cycle, through stronger returns and improved free cash flow per share. We are making good progress towards this aim in spite of current challenging market conditions.

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Shell Smashes Estimates as BG Acquisition Drives Up Output

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By Rakteem Katakey: November 1, 2016

Royal Dutch Shell Plc reported third-quarter profit that beat analyst estimates after its acquisition of BG Group Plc boosted oil production, helping to counter a slump in prices. The shares rose.

Profit adjusted for one-time items and inventory changes advanced 17 percent from a year earlier to $2.79 billion, The Hague-based Shell said Tuesday. That exceeded the $1.79 billion average estimate of 14 analysts surveyed by Bloomberg, and the earnings of U.S. giant Exxon Mobil Corp.

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Can Royal Dutch Shell plc Regain Its Mojo?

screen-shot-2016-10-31-at-19-00-26By Reuben Gregg BrewerOct 31, 2016

Royal Dutch Shell plc (NYSE:RDS-B) is one of a small and elite group of energy giants, competing with companies such as Chevron (NYSE:CVX) and ExxonMobil (NYSE:XOM). While this group is often, and correctly, thought of collectively as oil companies, Shell is pushing hard in a slightly different direction. So if you, as an investor, are wondering if Royal Dutch Shell can regain its mojo, you need to frame the answer in a slightly different way than you might have just a couple of years ago.

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Confidence in enlarged Shell-BG entity

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The week ahead in business and finance

By Tara Cunningham, business reporter: 30 OCTOBER 2016 • 11:41PM

Third Quarter Results: Tuesday, November 1

Confidence in enlarged Shell-BG entity was rattled after a very disappointing set of second quarter results, when it missed consensus forecasts by 52pc. Ahead of Tuesday’s interim results, analysts at UBS warned: “We don’t think it is reasonable to expect a significant uptick in earnings”.

Even though Royal Dutch Shell has a track-record of “volatile” quarters across the year, the bank highlighted that management have already been “quite explicit” in indicating that 2016 is likely to be “quite messy”.

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‘We sold Shell as its dividend looks shaky’

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Shell’s acquisition of rival company BG is likely to hurt its finances, making its dividend look more uncertainCREDIT: ARND WIEGMANN

By Laura Suter28 OCTOBER 2016 • 8:59AM

Tom Walker, manager of the Martin Currie Global Portfolio, has 59pc of his fund’s assets in American companies. While he is concerned about the outcome of the election, he does not think a Trump win will necessarily be terrible for the American economy or for the companies he invests in.

Mr Walker, who has run the fund since its launch, tells Telegraph Money why he recently invested in one giant Chinese firm and why he cut Royal Dutch Shell from the portfolio.

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Shell’s $30bn divestment programme: What we know so far

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Written by Mark Lammey – 22/10/2016 5:30 am

Oil and gas giant Shell plans to sell $30billion worth of assets from 2016 to 2018 to offset the cost of its $50billion takeover of BG Group, which was completed in February.

By the end of June, 2016, Shell had completed deals worth $1.5billion, according to its half-year results update.

Of that sum, $820million was generated by offloading interests in Shell Midstream Partners, while $560million came from the sale of property, plant and equipment and businesses.

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Royal Dutch Shell – Additional Divestments In Order To Sustain The Dividend

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Oct. 21, 2016 10:17 AM ET

Summary

  • Shell is announcing further divestments, this time selling part of its shale operations in Canada.
  • These moves do little to address the giant debt load, although they allow for cash flow neutrality this year.
  • Asset sales, resulting in smaller operations, combined with shareholder dilution hurt the long term potential as management stubbornly tries to preserve the dividend.

Royal Dutch Shell (RDS.A) announced another round of divestments in order to keep leverage under control, even as oil prices have rebounded a bit in recent times. These modest divestments are countercyclical and hurt production quite a bit in relation to the proceeds. At best cash outflows come to a standstill this year following these moves, although they result in a smaller business going forward, while investors see dilution of the shareholder base in order to sustain the unsustainable dividend.

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Shell selling 16 upstream assets worth more than $500 mln

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cropped-Screen-Shot-2016-09-09-at-20.58.10.jpgRoyal Dutch Shell is currently offering 16 assets worth more than $500 million for sale as part of its vast $30 billion three-year asset sales programme, the oil and gas company’s head of upstream Andy Brown said on Wednesday.

The Anglo-Dutch company launched the programme to reduce its debt following the acquisition of BG Group earlier this year. Uncertainty over the future oil price has led to a sharp slowdown in deal making in the sector in recent years.

“There are 16 assets currently in the market that are above $500 million in value,” Brown told the Oil and Money conference in London.

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Shell retains Deutsche Bank to seek buyer for California refinery

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By Jessica Resnick-Ault | NEW YORK

Oct 18 2016

Royal Dutch Shell plc has retained Deutsche Bank to sell its Martinez, California refinery, according to three people familiar with the matter.

Shell is in the midst of a three-year, $30 billion divestment plan following the company’s purchase of BG Group earlier this year.

A Shell spokesman said the company would not comment on “rumor or speculation.” Deutsche Bank declined to comment.

The refinery, located 30 miles (48 km) northeast of San Francisco, has been operating since 1915. It can process about 165,000 barrels of crude oil daily into gasoline, jet fuel, diesel and other refined products. It has a coker unit used for processing heavy grades of crude.

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Japan deal complications put Shell asset sales goal at risk

screen-shot-2016-10-18-at-10-39-37by: Andrew Ward, Energy Editor: 18 Oct 2016

Fresh from completion in January of its $50bn takeover of BG Group in the biggest oil and gas deal for a decade, Royal Dutch Shell is trying to sell $30bn of assets to pay off some of the debt that helped finance the acquisition.

Unfortunately for Shell, raising money from M&A is proving harder than it was to spend. At the end of June, proceeds from completed disposals stood at just $1.5bn.

FULL FT ARTICLE

Shell struggles to keep lavish divis gushing

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Danny Fortson: October 16, 2016

Something, at some point, has to give at Shell.

Chief executive Ben van Beurden made an epic bet last year when he agreed to pay £35bn to take over rival BG. The deal, struck in the midst of an oil and natural gas price downturn, was predicated on a recovery that has yet to materialise.

The longer the price slump goes on, the greater the strain on Shell’s balance sheet. And the harder it will be to make good on van Beurden’s pledge to sell $30bn (£24.6bn) of assets by 2018 to offset the cost of BG.

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Shell North Sea Sale Said to Draw Ineos, Siccar Point Bids

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cropped-Screen-Shot-2016-09-09-at-20.58.10.jpgBy Dinesh Nair: 12 October 2016

Royal Dutch Shell Plc has invited binding bids from parties including Ineos AG and Blackstone Group LP-backed Siccar Point Energy for the sale of some of its U.K. North Sea assets worth about $2 billion, according to people familiar with the matter.

North Sea-focused energy explorer Chrysaor Holdings Ltd. has teamed up with U.S. private equity firm EIG Global Energy Partners to submit a second-round bid before the Wednesday deadline, the people said, asking not to be identified as the information is private. No final agreements have been reached, they said.

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Outlook For Shell Mixed – Caution Ahead

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Gary Bourgeault: October 7, 2016

Summary

  • Debt load associated with BG Group acquisition still weighs heavily on Shell.
  • With a larger percentage of its business gas, it continues to struggle to sustainably break the $3 barrier.
  • EPS will probably drop by over 40 percent for the year.
  • Nigerian asset sales and risks to other holdings in the nation remain a concern.
  • Dividend could remain at current level if the price of oil and gas maintain a higher bottom.

Royal Dutch Shell plc (NYSE:RDS.A) has been taking some good steps to prepare for what it believes will be a strong future for LNG demand, as it puts various pieces of its infrastructure in place around the world. It has the goal of continuing to focus primarily on gas as its major product, looking for a time when it sustainably rebounds in price.

The long term prospects for Shell look fairly solid, but it does face some significant headwinds in the short term, including the debt overhang coming from its acquisition of BG Group, downward pressure on earnings per share (NYSEARCA:EPS), prolonged period of lower natural gas prices, and the loss of revenue from asset sales in Nigeria, along with the risk in the country for other projects it still has there.

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It’s boring, but Shell’s fat yield will reward patience

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Screen Shot 2016-08-29 at 22.18.50There are clear risks: history suggests the Opec deal to cut oil production and support prices won’t stick; the company still has to prove it can make its huge BG acquisition work; and the dividend is not covered by earnings for this year and barely covered for next.

4 OCTOBER 2016 • 8:28AM

Royal Dutch Shell

This tip won’t win many prizes for originality but patient, longterm income seekers may find it hard to overlook the prospect of a soundly financed company that offers a 7pc dividend yield while interest rates and yields on the safest bonds remain at rock bottom.

There are clear risks: history suggests the Opec deal to cut oil production and support prices won’t stick; the company still has to prove it can make its huge BG acquisition work; and the dividend is not covered by earnings for this year and barely covered for next.

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Carnival to power cruise ships with LNG

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UPI: Carnival to power cruise ships with LNG

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By Daniel J. Graeber: Oct 3, 2016

Maritime travel company Carnival Corp. said Monday it signed a deal to power its cruise ships with liquefied natural gas from Dutch energy company Shell.

Carnival said it signed up to become the first company of its kind to power vessels with liquefied natural gas. At the onset, Shell will supply LNG to two ships set for launch in 2019. The travel company said the agreement is part of a green initiative meant to reduce its environmental footprint.

“We are committed to reducing our air emissions and improving air quality by evaluating new and established solutions such as LNG — an especially promising option because of its environmental and other benefits,” Tom Strang, senior vice president of maritime affairs for Carnival Corp., said in a statement.

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The best historians Shell could buy

screen-shot-2016-10-24-at-14-26-11EBOOK BY JOHN DONOVAN: SIR HENRI DETERDING AND THE NAZI HISTORY OF ROYAL DUTCH SHELL

Chapter 1: The best historians Shell could buy

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Shell commissioned a group of eminent “independent” historians (above) mostly Dutch, to author a history of Royal Dutch Shell to mark the Group’s centenary in 2007.  The introduction in Volume 1 pledged independent research and “a proper and even-handed assessment of Deterding.” Something went amiss because the “history,” as published in regard to his dealings with Hitler, is simply untrue.

On 24 May 2015, a light-hearted story in the Prufrock column of The Sunday Times posed the question: “ARE corporate histories the new harbingers of doom?”  It cited the release of corporate histories of two multinational banks that proved embarrassing to the banks due to unforeseen developments.

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Shell’s Growth Priority Over The Next Five Years — Deepwater

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Trefis Team SEP 29, 2016 @ 08:42 AM

With the ever-growing energy needs worldwide, the conventional sources of energy are likely to exhaust soon. Having explored the majority of the onshore reserves, oil and gas producers around the globe are now moving to offshore reserves, that are primarily formations in deep waters, containing thick layers of oil and gas in permeable rock. Consequently, Deepwater drilling, often used to categorize drilling in water depths of greater than around 400 meters, has become an attractive alternative to onshore drilling. In line with this growing trend, Royal Dutch Shell (NYSE:RDS.A) has categorized Deepwater as one of its growth priorities for the next five years. (Also Read: Shell’s Growth Priority Over The Next Five Years – Chemicals) In this note, we discuss the growth potential of the deepwater market, Shell’s positioning in this market, and its strategy going forward.

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Shell leaves literal and symbolic void downtown

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Next year will mark the end of an era as Royal Dutch Shell largely abandons its iconic tower and consolidates workers on the west side of town in its Woodcreek complex in the Energy Corridor and the Shell Technology Center a few miles south of Woodcreek. Only Shell’s energy trading team will remain downtown.

The move – largely to cut costs in the ongoing oil bust – continues the exodus of Big Oil from downtown Houston. Exxon Mobil moved out last year when it built its massive new campus by Spring. Of Houston’s 10 largest energy employers, just Chevron and CenterPoint Energy remain downtown.

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