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




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


Oct. 21, 2016 10:17 AM ET


  • 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



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




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.


Shell struggles to keep lavish divis gushing



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



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




Gary Bourgeault: October 7, 2016


  • 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


UPI: Carnival to power cruise ships with LNG


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


Chapter 1: The best historians Shell could buy


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


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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Namesake tenant departing One Shell Plaza

screen-shot-2016-09-21-at-07-24-51The move will affect 3,400 employees when it takes place early next year as part of “an effort to meet the ever changing market conditions and optimize resources for future opportunities,” Shell said in a statement Tuesday. Employees will move to the company’s Woodcreek facility and Shell Technology Center on the west side of town.

Those who work for Shell’s downtown trading operations will stay put, although the company said it eventually plans to have all of its Houston-based staff in company-owned facilities on the west side.

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Shell cuts 225 jobs in Norway




Written by Niamh Burns – 20/09/2016 9:46 am

Oil major Shell has cut 225 positions from its operations in Norway following its takeover of BG Group.

The company said in May it would be making around 140 employees redundant with staff able to apply for severance packages.

According to reports in Norwegian media, 145 employees have lost their jobs while another 110 members of staff will also go.

A spokesman for the company said while some workers had taken voluntary redundancy, Shell would need to look at making additional job cuts.

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What Royal Dutch Shell Is Doing To Solve LNG’s Biggest Challenge




By Gary Bourgeault: 19 Sept 2016

There is one basic thing Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) needs to do to take full advantage of its LNG strategy, and that is to boost demand by increasing the number of fueling stations in the markets they’re competing in.

It has been marketing its LNG brand for some time, but it hasn’t had the desired impact in the short term because the infrastructure isn’t in place to respond to demand. If it can’t service demand than marketing efforts are underwhelming to say the least.

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Shell considering sale of Argentine assets


Thursday, September 8, 2016

Energy giant Royal Dutch Shell is evaluating whether to sell part of its assets in Argentina, the company said yesterday.

According to Executive President Ben van Beurden, refineries, transporting and distribution assets in the country could be put up for sale as part of a massive global disvestment programme worth an estimate US$30 billion. The move amounts to a massive revision of the firm’s “downstream” services, van Beurden said during a conference in New York.

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Royal Dutch Shell plc Ramps up Production Despite Crude at $50 per Barrel


By Staff Writer on Sep 7, 2016 at 11:30 am EST

The oil majors continue to overlook the low crude environment, which is expected to persist for longer, so much so that they have resorted to increasing their production at record-breaking highs. According to estimates by analysts, overall output from the seven largest energy giants globally is set to surge 9% between 2015 and 2018.

Energy giants are grappling with deteriorating balance sheet positions, even as prices continue to hover near $50 per barrel, dropping from $115 per barrel in June 2014. However, they continue to pump crude from plants sanctioned earlier.

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Shell’s North Sea exit could generate $1bn, says UBS

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Jillian Ambrose7 SEPTEMBER 2016 • 1:27PM

Shell could be in line to make $1bn (£750m) in the next two years by selling off North Sea assets as part of a $30bn divestment drive, according to UBS.

The bank predicts that Shell’s North Sea retreat will begin with a “tidying up” of the oil major’s high-cost, legacy assets but that a sale of its attractive core projects could not be ruled out.

UBS oil analyst Jon Rigby said that sales of the oil giant’s older North Sea assets would only generate “a few hundred million dollars” unless the company opts for a more “radical” approach including ditching stakes in the core projects that make up its $7bn North Sea portfolio.

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Despite cuts, oil giants look to expand production

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Ben Chapman: 6 Sept 2016

Never mind the drop in crude prices, huge spending cuts and thousands of job losses, the world’s top oil and gas companies are set to produce more than ever for some time.

While top oil companies struggle with slumping revenues following a price rout after years of spectacular growth, their production has grown as projects sanctioned earlier in the decade come on line. Overall production at the world’s seven biggest oil and gas companies is set to rise by around 9 per cent between 2015 and 2018, according to analysts’ estimates.

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Shell Midstream Partners – Reliable Yield During The Downturn

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Shell Midstream Partners IPO – Bidness ECT

The Value Portfolio: Sept 2, 2016

Shell Midstream Partners (NYSE: SHLX) is a master-limited partnership formed by Royal Dutch Shell (NYSE: RDS.A) (NYSE: RDS.B). The company was formed for the purpose of purchasing midstream assets and renting them out for reliable fee-based income. This fee-based income provides investors with a secure dividend which currently amounts to more than 3% and has a strong history of growth.

Shell Midstream Partners has had a difficult time recently, though not as a difficult of a time as all the other oil companies. Since mid-2015, when other midstream companies such as Kinder Morgan (NYSE: KMI) began to take a big hit, Shell Midstream Partners has seen its stock price drop from almost $48 per unit to just over $30 per unit, a drop of almost 40%. This drop means that Shell Midstream Partners has seen its yield almost double to more than 3% per unit.

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Shell Looking Beyond Petroleum

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There are many players looking to enter the oil markets thanks to the raft of deals available as the oil price crash appears to be over. For the oil majors, this will likely mean major opportunities to snap up unconventional producers and assets at low valuations. One “oil” major that may not be participating is Shell. The Anglo-Dutch oil giant is increasingly turning away from its roots in oil and moving towards natural gas as an alternative.

In the year 2000, 37 percent of Shell’s production was from natural gas. By 2015, that number had risen to 49 percent. For ExxonMobil, those figures were 40 percent in 2000 and 43 percent in 2015. For Chevron and BP, the 2000 figures were 27 percent and 40 percent respectively, and for 2015, it was 33 percent and 38 percent. Among oil majors, only ConocoPhillips has seen a comparable shift to gas going form 33 percent to 43 percent gas production between 2000 and 2015.

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Shell Sells Gulf Of Mexico Asset, But Faces A Tough Road Ahead

Screen Shot 2016-08-31 at 23.13.17Sarfaraz A. Khan: Aug. 31, 2016 3:20 PM ET


  • Royal Dutch Shell has agreed to sell its Brutus/Glider assets in the U.S. GoM to EnVen Energy for $425 million in cash.
  • The asset sale is a small step in the right direction which will improve Shell’s cash reserves.
  • The company, however, has made little progress toward achieving its target of selling $6Bn to $8Bn assets this year and $30Bn by 2018.

Royal Dutch Shell (RDS.A, RDS.B) has recently agreed to sell its Brutus/Glider assets in the U.S. Gulf of Mexico to Houston-based EnVen Energy for $425 million in cash. Shell was pumping 25,000 barrels of oil per day from these offshore properties, which was equivalent to 5.8% of the oil giant’s Gulf of Mexico production or less than 1% of its total production.

The asset sale is a small step in the right direction which will improve Shell’s cash reserves which stood at $15.2 billion at the end of June. Shell intends to sell $6 billion to $8 billion of assets this year. Overall, the company aims to dispose $30 billion of assets, spread in 5 to 10 countries and representing 10% of its production, by 2018. That will allow the company to reduce its debt which has ballooned following the $53 billion takeover of BG Group.

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Shell’s U.S deal to unlock global oil asset disposals

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* Shell lines up large North Sea asset sale

* In talks to sell out of Gabon, NZealand, Thailand, Tunisia

* Gulf of Mexico deal sets deal value at $60/bbl

* Shell seeks to sell $6-$8 bln of assets in 2016

By Ron Bousso: Wed Aug 31, 2016

LONDON, Royal Dutch Shell’s first oil field sale after its $54 billion BG Group acquisition bodes well for its disposal talks in the North Sea, Gabon and New Zealand, according to sources, signalling buyers will meet its expectations on value.

The $425 million deal in the Gulf of Mexico is welcome news for the Anglo-Dutch oil and gas giant which has struggled to kick off its plan to dispose of $30 billion of assets by 2018 or so in order to pay for the February deal and maintain a generous dividend policy amid soaring debt.

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Shell share price: Private equity-backed firms eye group’s North Sea assets

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Screen Shot 2016-08-29 at 22.18.50Anglo-Dutch oil major agrees to offload certain assets in Gulf of Mexico

by Tsveta ZikolovaTuesday, 30 Aug 2016, 09:00 BST

Investment companies backed by some of the world’s biggest private equity groups have expressed interest in Royal Dutch Shell’s (LON:RDSA) North Sea assets, the Financial Times has reported. The Anglo-Dutch oil major has unveiled plans to sell some $30 billion worth of assets across its global portfolio over the next three years or so is it looks to shore up its balance sheet in the wake of its acquisition of BG Group which completed earlier this year.

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Shell takes cash offer for Gulf of Mexico assets

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By Daniel J. Graeber: Aug 30, 2016

HOUSTON, Aug. 30 (UPI) — In a deal that included $425 million in cash, Royal Dutch Shell said it sold off its entire stake in assets held in the U.S. waters of the Gulf of Mexico.

Shell said the sale of the 100 percent stake of three blocks known collectively as the Brutus/Glider assets to EnVen Energy Corp. was in line with the company’s divestment strategy. In July, the company’s chief executive officer, Ben van Buerden, said “significant and lasting changes” were underway as lower crude oil prices continued to present problems for the industry.

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Shell’s North Sea assets draw eye of private equity-backed groups

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A significant downsizing…

Screen Shot 2016-08-22 at 08.09.54August 29, 2016

Investment companies backed by some of the world’s biggest private equity groups have expressed interest in North Sea assets being sold by Royal Dutch ShellShell insists it will not abandon the North Sea, where it has 33 platforms and interests in 65 fields. Further multibillion-dollar investment is planned in two big developments — Clair and Schiehallion — west of the Shetland Islands. However, Shell is looking to sell a range of older assets, as well as stakes in newer fields, in what would amount to a significant downsizing, according to people involved in the process.

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Can OPEC save BP plc and Royal Dutch Shell plc?

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By Ian Pierce – Thursday, 25 August, 2016

Oil majors must long for the halcyon days when a sustained period of low crude prices could be expected to send OPEC riding to the rescue with sweeping production cuts and a promise to boost global prices. Now, two years into a global supply glut that shows few signs of lifting, do oil majors need an OPEC to finally take action?

BP (LSE: BP) wouldn’t say no to the help. Interim results released last month saw underlying replacement cost profits, its preferred metric of profitability, slump 67% year-on-year. Add in a $2bn statutory loss for the period and net debt leaping to $30.9bn and worries have rightly begun to proliferate that dividends will be slashed sooner rather than later.

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Oil major debt climbs to record high as crude prices continue to wallow

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Billy Bambrough is City A.M.’s deputy news editor. Wednesday 24 August 2016

Some of the biggest global oil majors are being weighed down by record levels of debt.

Exxon Mobil, Royal Dutch Shell, BP and Chevron hold a combined net debt of $184bn (£138bn) — more than double their debt levels in 2014, according to analysis by the Wall Street Journal.

The drop in the oil price has been blamed for the soaring debt levels. The price of a barrel of oil remains less than half of what it was in the summer of 2014.

The enduring low oil price and soaring debt levels have caused some investors to question whether the majors will be able to fork out for new investments and dividends in coming quarters.

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Can we still be sure of Shell?

Screen Shot 2016-08-19 at 09.42.13By Kevin Godbold – Friday, 19 August, 2016

Our investing forefathers used to trot out the maxim ‘never sell Shell’. Years ago, Shell was a fast-growing business in a fast-growing market, so holding on to Shell shares indefinitely made more sense back then than it does now.   

Today, Royal Dutch Shell (LSE: RDSB) is a mature business in a mature market and its fortunes tend to ebb and flow with the undulations of wider macroeconomic cycles. Adopting a long-term buy-and-hold strategy for Shell now seems inappropriate.

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Shell advises JPMorgan to sell $1bn NZ oil portfolio

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BRIDGET CARTERMergers & Acquisitions Editor, Sydney

GRETCHEN FRIEMANNMergers & Acquisitions Editor, Sydney

19 August 2016

Shell has called on investment bank JPMorgan to offload its $1 billion-plus portfolio of oil exploration and production assets in New Zealand, with some analysts questioning whether Australian players will express interest in the offering.

It comes as part of a global selldown by the oil and gas giant, which signalled a retreat from various markets, amid a $US30bn ($39bn) global asset sale plan following its $US50bn takeover of BG Group.

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Cash flow problems at Shell?

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By Roland Head – Wednesday, 17 August, 2016

Oil and gas giants Royal Dutch Shell (LSE: RDSB) and (LSE: BP) have been among the top performers in the FTSE 100 so far this year. Shell stock is worth 31% more than at the start of January, while BP is up 23%.

But these gains don’t seem to reflect the weak state of the oil market or both companies’ rapidly-growing debt piles. Are investors turning a blind eye to the risk of a dividend cut in pursuit of the 7% yields available on both stocks?

Cash flow problems at Shell?

Shell’s interim results showed that the firm’s net debt has rocketed from $25.9bn one year ago to $75.1bn today. Much of this is due to the BG acquisition. I expect Shell to be able to refinance a lot of BG’s debt at much lower interest rates than those paid by BG.

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European energy groups press on with multibillion-dollar disposals

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Andrew Ward, Energy Editor: August 7, 2016

Extracts relating to Shell…

Royal Dutch Shell says it is working on 17 potential disposals as it seeks to reassure investors that its target for $30bn of asset sales by 2018 is achievable.

This balancing act is especially tricky for Shell as disposals are crucial to reduce debts after its £35bn takeover of BG Group, completed in February.

“Shell is going to have to be flexible on price if it is to move forward with some of these deals,” said one energy banker. “They cannot just sit back and wait for oil prices to come back.”

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Crude Slump Sees Oil Majors’ Debt Burden Double to $138 Billion

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Screen Shot 2016-07-29 at 16.46.22“On the debt, it may go up before it comes back down,” Shell Chief Financial Officer Simon Henry told investors last week. “And the major factor is the oil price.”

By Javier Blas: August 5, 2016

When commodity prices crashed in late 2014, oil executives could look at their mining counterparts with a sense of superiority.

Back then, the world’s biggest oil companies enjoyed relatively strong balance sheets, with little borrowing relative to the value of their assets. Miners entered the slump in a very different state and some of the world’s largest — Rio Tinto Plc, Anglo American Plc and Glencore Plc — had to reduce dividends and employ draconian spending cuts to bring their debt under control.

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Dutchdude 2016/08/05 at 3:03 pm

A few weeks ago there were some posts about Shell pocketing the tax relief of those taking the severance package. I had expected a bit more comments on this? Is the principle of tax not that it goes to the government? Since when do we allow companies to impose their own tax? Apart from the unfairness to the employees who worked for this and made sacrifices, it feels incorrect and arrogant. Tax should go to the government and tax relief to the person who is entitled to it. It should not be allowed to be taken away by unscrupulous HR staff. If there is a reader here who works for the government tax department please raise this with your employer (UK, Holland, …). I bet that each severance employee rather pays tax to his government than to Shell.

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Is Royal Dutch Shell plc’s dividend living on borrowed time?

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By Harvey Jones – Friday, 5 August, 2016

All good things come to an end, and I’m afraid this old saying is increasingly likely to apply to today’s sky-high dividend paid by Royal Dutch Shell (LSE: RDSB).

Unsure of Shell

The oil major has a proud record of raising its dividend every year since the Second World War, but that record surely can’t last much longer. Shell faces a different type of global threat these days as the after-effects of the financial crisis continue to rumble on (or even intensify), and the oil price plunges once again.

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Shell share price: Analysts flag concerns over group’s debt pile

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by Mary MorleyTuesday, 02 Aug 2016, 10:38 BST

The latest fall in oil prices has revived concerns about Royal Dutch Shell’s (LON:RDSA) debt pile, analysts at RBC have said. The comments follow the oil major’s second-quarter results last week when the Anglo-Dutch group posted a hefty drop in profits.

Shell’s share price has fallen into negative territory in today’s session, tracking crude lower. As of 10:09 BST, the shares were changing hands 1.85 percent in the red at 1,853.50p, underperforming the benchmark FTSE 100 index which currently stands 0.77 percent lower at 6,642.68 points. The group’s shares have been little changed over the past year, and are up by more than a fifth in the year-to-date.

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Shell slips as concern shifts to debt pile

Screen Shot 2016-08-01 at 21.59.50Bryce Elder: August 1, 2016 6:40 pm

With oil at three-month lows, concerns about Royal Dutch Shell ’s debt burden left it among Monday’s biggest fallers.

RBC said that while investors had become more comfortable with Shell’s purchase of BG, the weak oil price had shifted attention to Shell’s $75bn of net debt and its reliance on disposals.


How Exxon Mobil, Royal Dutch Shell, BP Are Affected by Low Oil Prices

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By Muhammad Ali Khawar on Aug 1, 2016 at 7:57 am EST

Just when you thought oil prices will rebound they got even worse. The last few weeks have been quite eventful for the oil and gas industry, with companies releasing their second-quarter earnings. The quarter hasn’t been as rewarding for integrated oil and gas majors.

The decline in crude oil price has persisted for quite a while now. West Texas Intermediate was down 0.50% at $41.40 per barrel, while Brent Crude was down 0.32% at $43.39 per barrel, earlier today.

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Royal Dutch Shell stake in Woodside Petroleum ‘held for sale’

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by Angela Macdonald-Smith: July 29 2016

Royal Dutch Shell looks to be heading for an exit from Woodside Petroleum sooner rather than later, after reclassifying its remaining $3 billion stake in the Australian oil and gas producer as an “asset for sale”.

The move appears to be driven by technical reasons because of Shell’s reduced representation on Woodside’s board. But at the same time it may signal a firmer intention to dispose of the circa 13 per cent stake, which Shell has for some time declared as a non-strategic holding.

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Shell’s Debt Nears Edge of Comfort Zone as Rout Boosts Borrowing

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Net debt increased to a record $75 billion at the end of June from $70 billion three months earlier, Shell said Thursday as it reported a slump in second-quarter earnings. Additional borrowing drove up the ratio of net debt to capital, or gearing, to 28.1 percent — more than double the year-earlier level.

“We’re close to the maximum level and it could go up still with the oil price where it is,” Chief Financial Officer Simon Henry said on a conference call. “Thirty percent is an upper limit to where we can describe our position as comfortable.”

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Royal Dutch Shell may have to slash its dividend – analysts Share

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17:00 28 Jul 2016

Investors in Royal Dutch Shell PLC (LON:RDSB) should be steeling themselves for an eventual cut in their dividend payouts, according to analysts.

In half-year results on Thursday, the Anglo-Dutch company held its interim dividend steady, at 47 cents, despite underlying earnings for the quarter falling 72% to US$1bn.

Its gas and downstream businesses fuelled earnings, more than outweighing a US$2bn loss in the upstream division, which faced one-off charges of US$649mln.

But shares in the group fell 53.5p, or 2.5%, to 2051.5p.

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Dividend At Risk – Royal Dutch Shell

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Shell produced a meager $3B of operating Cashflow for H1 2016.

Cash Commitments for Capex, Debt and Dividends were about $20B.

Shell does not stack up until an oil recovery to $80 IMO.


Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) released results this morning in Europe. Both the London and Amsterdam listings are down 4%. RDS is yielding about 7% this morning at current prices in Amsterdam.

Let’s get the disclosure bit over with. I was long Shell up until a few months ago. I sold as its share price recovered from the January meltdown. Having analyzed the company several times on SA, I concluded I was not comfortable holding the stock. Of course, if I had continued to hold and sold now, I would have made a much better return at today’s prices.

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Shell: Paradise Postponed

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By Chris Hughes: July 28, 2016

Royal Dutch Shell has delivered a shock.

Weeks after cheering investors with a big plan for living within its means, the oil major’s second-quarter earnings plummeted from $3.4 billion to $239 million. Paradise — a cash-generative company driven by February’s $64 billion acquisition of BG Group — has been postponed.

So much for the benefits of BG. This was the first set of numbers to include a full contribution for the acquisition, and so far the deal has pushed indebtedness higher while introducing a raft of one-off integration costs.

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Shell focusing on ‘lasting changes’

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THE HAGUE, Netherlands, July 28 (UPI) — Lower crude oil prices continue to present problems for the industry and Shell is now focused on retooling efforts, the chief executive officer said.

“We are making significant and lasting changes to Shell’s working practices and cost structure,” CEO Ben van Buerden said in a statement.

Shell, moving through the year after a merger with British energy company BG Group, said net income during the second quarter fell more than 70 percent to $1.18 billion. The company attributed the decline in part to some of the fiscal pressures from its $7 billion tie-up with BG Group, weak industry conditions and tougher tax regimes.

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Shell misses expectations with 70 percent earnings plunge

Screen Shot 2016-07-28 at 08.37.58By REUTERS: PUBLISHED: 08:16, 28 July 2016

By Karolin Schaps and Dmitry Zhdannikov

LONDON, July 28 (Reuters) – Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analyst estimates, blaming weak oil prices, poor refining profits and higher charges resulting from its $54 billion acquisition of BG Group.

Shell’s current cost of supplies — its definition of net income — came to $1 billion in the second quarter, compared with analyst expectations of $2.2 billion and $3.8 billion achieved the same time last year.

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Shell profit falls 93% amid low oil prices

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The quarter was the first full one that included BG Group PLC, which Shell bought in a roughly $50 billion acquisition that completed in February.

“Downstream and integrated gas businesses contributed strongly to the results, alongside Shell’s self-help program. However, lower oil prices continue to be a significant challenge across the business, particularly in the upstream,” said Shell Chief Executive Ben van Beurden.


2 Red Flags on Royal Dutch Shell’s Cash Flow Statement

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Reuben Gregg BrewerJul 22, 2016 at 1:16PM

Royal Dutch Shell (NYSE:RDS-A) (NYSE:RDS-B) has been hit just as hard by the oil industry downturn as any other oil major. So far, though, it’s managed to keep its dividend intact. Still, the company’s cash flow statement bears watching, because keeping that dividend going is getting harder to pull off. Here are two red flags to watch on Royal Dutch Shell’s cash flow statement.   

Cash flow, not earnings

Shell’s earnings cratered following the mid-2014 oil price drop, going from around $3.00 a share in 2014 to just $0.60 or so last year. (Note that the U.S. traded ADRs represent two shares of Shell stock, so these figures and all of the other per share numbers in the text, which are based on one share of stock, may be half of what you expect to see if you own the ADR.) In the first quarter of this year, the integrated oil giant only earned about a dime a share. Clearly, things aren’t going well for Shell’s business right now. That’s understandable, since oil and natural gas prices play a big part in the company’s results, but there are implications to the bottom-line decline.  

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Is Gas The Future? Shell Seems To Think So

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By Gregory Brew – Jul 20, 2016

The world’s second largest private oil company sees a new future, and it’s not in oil.

Shell has made a concerted effort to shift the bulk of its business from oil-related projects to natural gas, LNG and renewables. Coming on the heels of its February purchase of BG Group (a $54 billion acquisition), Shell has organized a division focused solely on renewable energy. It announced new investment for its LNG facility on Curtis Island in Australia, where natural gas has enjoyed $180 billion in new capital. It has emerged as a stronger voice on global climate change than its competitor ExxonMobil and the company’s website proposes a number of “Shell Scenarios” that could allow for a growing energy market while creating less CO2.

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Royal Dutch Shell: Huge Dividend And Long-Term Growth Ahead

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Wayne Duggan: 20 July 2016

A number of British stocks have been hit hard since the referendum vote to leave the EU, but Royal Dutch Shell (RDS.A, RDS.B) is not one of them. Shares are now up 0.3% since the Brexit vote after initially falling more than 8% during the knee-jerk market sell-off.

With the possibility that the Brexit could severely impact British GDP growth in coming years, RDS.B offers a unique opportunity to invest in a company within a sector that is in a global upswing, a company that has significant international exposure and a company that is committed to maintaining the single largest dividend payment in the MSCI World Index.

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