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Largest Oil Companies’ Debts Hit Record High

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By SELINA WILLIAMS and BRADLEY OLSON: Aug. 24, 2016 

Executives at BP, Shell, Exxon and Chevron have assured investors that they will generate enough cash in 2017 to pay for new investments and dividends, but some shareholders are skeptical. In the first half of 2015, the companies fell short of that goal by $40 billion, according to a Wall Street Journal analysis of their numbers.

“Eventually something will give,” said Michael Hulme, manager of the $550 million Carmignac Commodities Fund, which holds stakes in Shell and Exxon. “These companies won’t be able to maintain the current dividends at $50 to $60 oil—it’s unsustainable.”

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Royal Dutch Shell, Chevron Corporation: Is it Time to Leave Nigeria?

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Bidness Etc discusses how militant groups are affecting operations of foreign energy companies in Nigeria

By Staff Writer on Aug 22, 2016

Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Chevron, and other energy companies are losing hope in the Nigerian government as the safety conditions of the country are not showing signs of improvement. Although on Saturday, the Niger Delta Avengers (NDA) agreed on a ceasefire, the emergence of other militant groups along with low probability of a deal between the officials and the groups anytime soon has raised doubt about the country’s oil and gas sector recovery.

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How sustainable is Royal Dutch Shell plc’s 6% yield?

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By Prabhat Sakya – Monday, 22 August, 2016

Royal Dutch Shell (LSE:RDSB) is a £75bn company listed on the FTSE 100. It explores for, produces and refines both oil and gas products and has a long and proud dividend history. In February 2016 it acquired gas firm BG, meaning it now produces more gas than oil. So far, so straightforward.

But it has been hit hard by falling commodity prices, as both the value of oil and gas have tumbled over the past year.

Shell was hugely profitable

Currently Shell pays out a 6.1% dividend yield. That’s a high income, and it gives the company strong appeal to dividend investors. The question is, how sustainable is that yield?

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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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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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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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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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Is this the beginning of the end for Royal Dutch Shell plc and BP plc?

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By Rupert HargreavesThe Motley Fool  Aug 4, 2016

Over the past 10 years, the oil industry has changed dramatically. Technological advances have helped reduce the cost of extracting oil from unconventional sources significantly, and as oil prices have plunged over the past two years, shale oil producers have ploughed more time and resources into pushing costs even lower.

As a result of this unrelenting drive to reduce costs and improve efficiency, it’s estimated that the majority of US shale fields can break even with oil at $60 a barrel. Scott Sheffield, the outgoing chief of Pioneer Natural Resources claims that Pioneer’s pre-tax production costs have fallen to $2.25 a barrel.

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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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Oil Giants Find There’s Nowhere to Hide From Doomsday Market

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By Joe CarrollJuly 29, 2016 — 1:02 PM BST: Updated on July 30, 2016 — 5:01 AM BST

Exxon Mobil Corp. and Royal Dutch Shell Plc this week reported their lowest quarterly profits since 1999 and 2005, respectively. Chevron Corp.’s third straight loss marked the longest slump in 27 years, and BP Plc lodged its lowest refining margins in six years.

Welcome to year two of a supply overhang so persistent it’s upsetting industry expectations that the market would return to a state of balance between production and demand. It’s left analysts befuddled and investors running to the doorways as the crude market threatened to tip into yet another bear market, dashing hopes that a slump that began in mid 2014 would show signs of abating.

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This Is Why Oil Firms Suffered Another Awful Earnings Season

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Screen Shot 2016-07-30 at 15.00.46BKatie Fehrenbacher: JULY 29, 2016

Analysts expected the oil giants’ cost cutting to help more.

Many of the world’s biggest oil companies continue to feel the pain as low oil prices continue to undercut profits and lead to shuttered projects and layoffs.

Exxon, Royal Dutch Shell, Statoil, BP, and Chevron announced dismal earnings this week, missing expectations and showing how slashing spending and pulling back isn’t yet enough in a world where oil has dropped from a high of $115-per-barrel in 2014 to a low of $27-per-barrel in January of this year.

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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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Summary

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.

Introduction

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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PHOTOGRAPHER: ANDREY RUDAKOV

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.

FULL ARTICLE

Oil giants hit amid fears of drop in demand

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PUBLISHED: 25/07/2016

The FTSE 100 index was off 20.4 points to 6710.13, as Brent crude sunk 1.9% to 44.83 US dollars (£37.50) a barrel after a report from Barclays warned global oil demand was down amid lacklustre growth from the global economy.

BP dropped 2.6%, or 11.8p, to 440.4p ahead of its interim results on Tuesday, while rival Royal Dutch Shell was also languishing in the red, slipping 2.5%, or 54.5p, to 2093.5p.

Sterling was also under pressure after a report from the Confederation of British Industry (CBI) said business optimism had deteriorated at its fastest pace since January 2009 following the Brexit vote.

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Next Week Is as Good as It Gets for Big Oil

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ByRakteem Katakey and Joe Carroll: 22 July 2016

Several majors expected to post highest earnings in 3 quarters

Strong performance may not last as oil seen easing back to $40

For oil companies, the second quarter might be as good as it gets.

Shares gained more than in any other industry, thanks to crude rising from a 12-year low. Profits were the best in at least three quarters for majors including Royal Dutch Shell Plc, Chevron Corp. and BP Plc, helped by cost cuts, analysts say. The rest of the year might not be as rosy as supply holds near record levels.

The combined market value of the world’s oil companies shrank by $2 trillion in the past two years following crude’s collapse. While analysts agree the worst of the oversupply is over, BNP Paribas SA and JBC Energy GmbH are among those forecasting a slide back to $40 a barrel as output rebounds in Canada, Iran, Nigeria and the U.S., hurting producers whose investment cuts have put future growth in doubt.

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Royal Dutch Shell: Does Everything Come Down to Oil Price Recovery?

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By Staff Writer on Jul 19, 2016 at 9:07 am EST

World’s leading integrated oil and gas company, Royal Dutch Shell plc (ADR) (NYSE:RDS.A), concluded a deal to acquire BG not too long ago. The move was widely perceived as an aggressive step to become a dominant supplier of liquefied natural gas (LNG) across the globe. The deal is expected to help Shell diversify its operations and enable it to benefit from cost synergies in the years to come.

The merger came at a time when oil prices were on a downward trajectory, with the step expected to drive the company out of the downturn. Oil prices that were once above $110 per barrel have now plunged below $50. Last year, when the Dutch company announced the deal, many mergers and acquisition pundits criticized Shell’s willingness to pay 50% premium in a depressed crude oil environment.

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Barron’s: Shell is “the world’s best big oil stock”

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Jul 18 2016, 11:44 ET | By: Carl Surran, SA News Editor

Royal Dutch Shell (RDS.A +0.2%) appears barely affected by a Barron’s cover story this weekend which calls it “the world’s best big oil stock,” whose makeover could lift shares by more than 20% in a year even without a rise in oil prices.

Barron’s Jack Hough says Shell’s cost cuts and divestments look like more like a “recommitment to capitalism” rather than just an austerity drive, and has increased confidence in the company’s lofty 6.6% dividend yield.

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Getting Ready for Another Round of Commodity Market Downturn

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By Staff Writer on Jul 18, 2016 at 7:30 am EST

Crude oil prices have dropped below the $50 per barrel mark yet again after hitting their highest level in 2016 last month. US crude benchmark, West Texas Intermediate (WTI) is trading at $45.97 per barrel while Brent is trading at $47.69 per barrel in European Markets today. The global crude oil benchmark reached as high as $52.51 per barrel earlier in June.

Although oil prices have recovered some momentum after touching 12-year lows of $27 per barrel earlier in 2016, it still has a lot of ground to gain before reaching summer-2014 levels. Oil market showed some positive gains in June when oil prices crossed the psychological barrier of $50 per barrel. However, it was short-lived as it is currently trading below $48 per barrel.

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Shell with a full tank of debt

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By JACK HOUGH: JULY 16, 2016

A dash of desperation is working wonders for module article chiclet Royal Dutch Shell. The price of Brent crude oil has fallen by half in two years, pulling Shell’s cash flow from operations well below what it typically needs to pay its dividend and fund exploration. Meanwhile, the purchase of United Kingdom gas specialist BG Group, completed in February, left Shell with a full tank of debt.

Something had to give. Investors braced for a dividend cut, which is why the American depositary receipts (ticker: RDS.B) started the year priced low enough to yield 8%. But rather than reduce its payout, Shell slashed spending on projects and sold low-return businesses. Last month, it announced a capital plan through 2020 that calls for more asset sales and a limit on capital spending.

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Royal Dutch Shell Vs BP plc: Who’s Better Equipped to Tackle the Downturn?

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By Muhammad Ali Khawar on Jul 15, 2016 at 10:04 am EST

Royal Dutch Shell plc. (ADR) (NYSE:RDS.A) finally closed its $52 billion merger with BG group in February. The deal is considered as one of the largest mergers in the oil and gas sector and is expected to help Shell diversify its operations and benefit from cost synergies.

The Shell-BG merger comes at a time when oil prices have plummeted significantly. Oil prices that once traded over $110 per barrel have now tumbled to as low as $50 per barrel. Last year, when Shell approached BG for the first time, many criticized the deal especially because of the 50% premium Shell was willing to pay in a depressed crude environment.

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S&P trims rating on oil major

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by Tsveta ZikolovaWednesday, 13 Jul 2016, 14:09 BST

Standard & Poor’s has trimmed its rating on Royal Dutch Shell (LON:RDSA), the Financial Times has reported. The move has been prompted by the group’s £35-billion takeover of former smaller London-listed peer BG Group completed earlier this year.

Shell’s share price has been little changed in today’s session, having lost 0.07 percent to stand at 2,106.00p as of 13:25 BST. The shares are marginally underperforming the broader London market, with the benchmark FTSE 100 index having inched 0.12 percent higher to 6,688.62 points. Shell’s shares have gained nearly 16 percent over the past year, and are up just under 38 percent in the year-to-date.

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Exclusive – Shell CEO warns Brexit could slow $30 billion asset sale plan

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Screen Shot 2016-06-30 at 18.15.43By Ron Bousso and Freya Berry: 08/07 11:41 CET

LONDON (Reuters) – Royal Dutch Shell’s chief executive, Ben van Beurden, has told investors that Britain’s decision to exit the European Union could slow its $30 billion (23 billion pounds) asset sale plan, especially in the North Sea which had struggled to attract buyers for years.

The comment, made during an investor and analyst event at the Wimbledon tennis tournament this week, came as Shell mandated Bank of America Merrill Lynch to find buyers for several key assets in the North Sea, including its stake in the lucrative Buzzard oilfield, hoping the sale would raise at least $2 billion.

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Shell chief Ben van Beurden: ‘You cannot expect us to act against our economic interest’

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By Emily Gosden, energy editor: 2 JULY 2016 • 2:30PM

On the last Thursday in January, the day Royal Dutch Shell’s £35bn takeover of BG Group got the final seal of approval from BG shareholders, Ben van Beurden was not planning a celebration.

Shell’s chief executive was instead preparing to get on with the detailed work of integrating the two companies: some 200 senior staff from Shell and BG had been assembled in The Hague, ready to spend Friday and the weekend working out what would happen when one of the biggest deals in history finally completed.

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Royal Dutch Shell: This Is Another Catalyst

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Jun. 30, 2016 4:35 PM ET

Summary

  • Royal Dutch Shell witnessed weakness in the downstream segment last quarter due to lower refining margins, but this is about to change going forward.
  • There has been a rapid recovery in the refining marker margins, which has increased from around $9 a barrel to almost $17 a barrel within a short time.
  • Shell’s downstream performance will improve as refining margins in the second quarter averaged higher than the first quarter, with more upside expected going forward.
  • Driven by higher gasoline consumption and increasing utilization rates, refining margins will increase in the long run and act as a tailwind for Shell.
  • Shell’s structural improvements in the downstream, such as refinery integration in Louisiana, will allow it to lower costs and tap the end-market demand in a better manner.

In a recent article on Royal Dutch Shell (RDS.A, RDS.B), I had focused on how an improvement in the upstream business will bring about a recovery in the company’s overall financial performance. The upstream business was under a lot of pressure in the first quarter, and a rally in oil prices over the past few months will ease the pressure on the same as oil price realizations improve.

But, being an integrated oil and gas company, Shell’s performance will also be driven by its downstream segment, which was also under pressure last quarter as refining margins took a tumble. So, in this article, we will see how Shell’s downstream segment has done and how it might do going forward.

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Royal Dutch Shell plc and Gemfields plc: the perfect resources partnership?

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By Peter Stephens – Wednesday, 29 June, 2016

With the price of oil having made a storming comeback since earlier this year, Shell (LSE: RDSB) now has a much brighter future than it did just a few months ago. Clearly, there are still challenges ahead for the oil major, with there being a very real possibility that the price of oil could come under further pressure. That’s especially the case if Brexit acts as a negative catalyst on global economic growth and demand for oil falls yet further.

However, even in such a situation, Shell remains an appealing play due to its size and scale. In fact, Shell would be likely to benefit from such a situation, since it could likely outlast most of its sector peers and emerge in a stronger position with greater market share when oil eventually recovers.

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Why Royal Dutch Shell plc’s share price could collapse 60%!

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…with the fossil fuel giant battling a gigantic $70bn debt pile as well as a sickly revenues outlook, I believe asset sales alone may not be enough to keep the balance sheet afloat, and that dividend cuts could still be on the cards.

By Royston Wild – Monday, 27 June, 2016

Despite the volatility smashing financial markets on Friday — Britain’s decision to exit the European Union caused the FTSE 100 to shunt 3.2% lower — oil sector shares proved to be extraordinarily robust.

Indeed, fossil fuel giant Shell (LSE: RDSB) saw its share price slip just 0.3% on the day. This is despite wide risk-aversion pushing Brent back below $50 per barrel, the crude benchmark shedding 5% of its value to rest at $48.50.

Steady… for the moment

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Shell’s Ambitious Plan To Topple Exxon

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By Rakesh Upadhyay – Jun 22, 2016, 5:17 PM CDT

Ben Van Beurden, Chief Executive Officer of Royal Dutch Shell has laid out an ambitious plan to overtake ExxonMobil as the number one oil company in the world.

Prior to the 1990s, Shell was the leader in total shareholder returns, however, its rivals went on a deal-making spree to gain the lead, while Shell shied away from making any acquisitions. Now, Mr. Beurden believes that Shell will be able to regain its lost glory post the acquisition of the BG group.

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Royal Dutch Shell, Chevron Corporation: Niger Delta Avengers Agree to Peace Talks

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By Staff WriterJun 14, 2016

Screen Shot 2016-05-21 at 10.18.28Finally, Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Chevron and other oil and gas companies can heave a sigh of relief as the militant group, Niger Delta Avengers has agreed to consider peace talks with the Nigerian government. The group has said that it does not have new demands, as it just wants foreign oil and gas companies to leave the southern region of the Niger Delta and stop oil pollution.

The group said it wants “genuine attitude” by the government and a “conducive atmosphere” to carry out dialogue. This is definitely good news for the Nigerian economy and international energy companies which have suffered badly in the past few months. The Avengers started to attack oil infrastructure in February, when they blew up Shell’s Forcados terminal and under-water pipeline.

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Bad news for fossil fuels

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By Ed Crooks: June 10. 2016

Two of the most widely respected energy analysts – BP’s economics team and the International Energy Agency – published reports this week, and both brought bad news for fossil fuel producers. They differed, however, in the focus of their gloomy perspectives. For BP, publishing its 65th annual Statistical Review of World Energy, it was coal that came off worst. As Spencer Dale, BP’s chief economist, put it in his presentation, “2015 was undoubtedly an annus horribilis for coal”. The shift to natural gas for power generation in the US gathered pace, and there was a second consecutive year of declining consumption in China.

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What Caused Royal Dutch Shell’s Shares To Soar

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Arie Goren: Jun. 9, 2016 6:14 AM ET

Screen Shot 2016-05-21 at 10.18.28Summary

  • In its Tuesday, June 7, investor meeting, Shell offered a very encouraging update on the company’s strategy, which sets a clear course for stronger returns and free cash flow.
  • Oil prices have shown a significant rebound in the last five months. As such, we can expect much better results for Shell’s upstream operations in the forward quarters.
  • Investing in a supermajor integrated oil & gas company like Royal Dutch Shell will give investors a significant price appreciation when oil prices recover along very generous dividend yielding 7.1%.
  • In my view, we can learn from the company’s new strategy that the dividend is sustainable.

Shares of Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) soared in the last two days after its Chief Executive Officer Ben van Beurden provided on Tuesday, June 7, an update on the company’s strategy, that according to the company, sets a clear course for stronger returns and free cash flow. Shares of RDS.A have increased 6.43% in the last two days and shares of RDS.B have risen 6.58%.

Since the beginning of the year, RDS.A’s stock is already up 15.7% while the S&P 500 Index has increased 3.7% and the NASDAQ Composite Index has lost 0.7%. However, since the beginning of 2012, RDS.A’s stock has lost 27.5%. In this period, the S&P 500 Index has increased 68.5% and the Nasdaq Composite Index has risen 91%.

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Shell signals retreat from North Sea amid further cost cutting

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Screen Shot 2016-05-21 at 10.18.28By MARK WILLIAMSON: 8 June 2016

ROYAL Dutch Shell has given a further signal it will retreat from the North Sea as the company said it will continue with deep cuts in spending amid the crude price plunge.

Chief executive Ben van Beurden said the oil and gas giant will focus investment on the kind of big fields which will generate high returns over the long term and which the company has made clear are in short supply in the North Sea.

Shell is investing heavily in two giant fields West of Shetland with BP, which are due to come onstream in coming months and could be in production for years, but has nothing similar in the pipeline.

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Shell cuts cost for the rest of the decade after takeover

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By DAVID SHANDPUBLISHED: 00:03, Wed, Jun 8, 2016

The company set out its plans to create a “world class investment case” for shareholders following its £35billion takeover of fellow FTSE 100 oil and gas giant BG Group, which will include more asset sales and cost-cutting.

In its presentation to investors, Shell said it would squeeze an extra $1billion (£690million) in savings from the BG deal from an earlier $3.5billion forecast.

It aims to sell 10 per cent of its oil and gas production by exiting operations in up to 10 countries.

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Royal Dutch Shell’s High-Wire Act

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By PAUL J. DAVIES: June 7, 2016 11:48 a.m. ET

For Royal Dutch Shell , austerity is tricky. The Anglo-Dutch oil and gas group is doing almost everything it can to make its finances work. The trouble for investors is that it still may not be enough.

Shell has found more cost savings more quickly from its takeover of BG Group and is slashing its investment plans back to almost the minimum needed to keep producing. But without a recovery in oil and gas prices it will struggle to balance its long-term prospects with near-term promises.

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Shell’s Big Find

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Screen Shot 2016-06-06 at 10.26.15By Chris Hughes: June 7, 2016

Shell is learning not to waste a crisis.

The Anglo-Dutch oil major is pulling on every lever to deal with the consequences of agreeing a takeover of rival BG Group just before the oil price collapsed last year. Shareholders can only hope that the zeal it now shows for running a tight ship will endure once the company is on a surer footing.

The $54 billion cash-and-shares purchase of BG was completed in the first quarter, just as the oil price hit rock bottom. As of March 31, Shell’s net borrowings had shot up from $27 billion to $70 billion. Operating cash flow on a 12-month rolling basis was $23 billion — too low for a company then targeting $33 billion of annual capital expenditure and accustomed to paying $10 billion of cash dividends annually, even allowing for a contribution from BG. No wonder analysts have been penciling in dividend cuts.

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Shell’s bonus for City as drilling for savings yields extra $1 billion

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RUSSELL LYNCH: 7 June 2016

Royal Dutch Shell boss Ben van Beurden delivered a $1 billion (£688 million) present to the City today as he pumped up more savings from the oil major’s $54 billion mega-merger with rival BG Group.

The shares rose almost 3%, or 48p, to 1749p as the cost-cutting drive, which has stepped up a gear since the deal completed in January, now promises $4.5 billion in savings by 2018. 

That compares with the $3.5 billion previously estimated.

The latest savings will not involve further job cuts on top of the extra 2200 announced two weeks ago by the firm, which took the total number of jobs shed through the merger to at least 12,500. 

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Shell caps spending for rest of the decade as belt tightening continues

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By Jon Yeomans7 JUNE 2016 • 9:33AM

Oil giant Shell is targeting yet more cost savings as it looks to pay down debt and protect its dividend in an era of lower oil prices.

The Anglo Dutch giant said today capital spending would be in the range of $25-$30bn a year to 2020. For 2016 it will be $29bn, down from a forecast “trending toward” $30bn, which was itself down from an earlier projection of $33bn.

The company said this spending could go even lower if oil prices sink below their current levels, but crucially would not go higher if oil surges. Crude has stabilised at around $50 a barrel, after hitting a 12-year low of $28 a barrel in January. It was trading at more than $100 two years ago. 

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Shell to exit up to 10 countries after BG deal

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LONDON | BY RON BOUSSO AND KAROLIN SCHAPS: Tue Jun 7, 2016

Royal Dutch Shell (RDSa.L) will exit oil and gas operations in up to 10 countries in a drive to deepen cost cuts and narrow its focus following its $54 billion acquisition of BG Group.

Presenting its strategy following the close of that deal in February, the Anglo-Dutch company outlined plans to target annual spending of $25 billion to $30 billion until the end of the decade.

It lowered its planned 2016 capex to $29 billion in a third cut from an initial $35 billion.

Shell also raised its target for savings from the integration of BG to $4.5 billion, up $1 billion from previous guidance.

Chief Executive Officer Ben van Beurden hopes the new cuts will help boost Shell’s shares, which have underperformed rivals since the BG deal was announced in April 2015.

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Report suggests Shell may be about to reveal more cost-cutting

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Screen Shot 2016-05-21 at 10.18.28Written by Keith Findlay – 06/06/2016 7:09 am

Oil giant Shell may be about to announce further cost cutting and a possible delay to its plans to offload assets, a report said yesterday.

Chief executive Ben van Beurden is under “increasing pressure” to justify the firm’s £35billion takeover of BG Group in the middle of a severe oil and gas industry slump, it added.

Shell is holding a capital markets day for investors tomorrow and it is thought it may update on its sale plans and fresh cost-cutting then.

Last month, Shell chief financial officer Simon Henry said cost levels in the North Sea needed to come down “substantially”.

Action already taken to integrate BG within Shell’s operations, including job cuts, were “probably about it for now” but he did not rule out further headcount reductions.

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Shell poised for deep cuts as BG casts shadow

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Danny Fortson: June 5 2016, 12:01am, The Sunday Times

Shell could show fresh signs of financial strain from its takeover of rival BG this week as it lays out plans for deeper cost-cuts and a potential delay in the mammoth asset sale launched by the oil giant to help pay for the £35bn deal.

Chief executive Ben van Beurden is under increasing pressure to justify the blockbuster acquisition, which he pulled off despite the plunging oil price.

Crude closed on Friday at $49 a barrel, less than half its 2014 high.

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Shell Nigeria boss warns Avenger attacks causing “significant decline” in production levels

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Screen Shot 2016-05-21 at 10.18.28Written by Niamh Burns – 01/06/2016 1:58 pm

Shell’s Nigerian country chair said recent attacks by terrorists in the country had contributed to a “significant decline” in production levels.

A number of companies oil sites have been attacked recently in a spate of attacks by the Niger Delta Avengers.

Earlier today the group revealed it had attacked a Chevron oil facility.

Speaking to Nigeria media, Osagie Okunbor said unrest in the region had impacted on production, delays to projects and loss of government revenue.

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Shell becomes a player in the recovery of oil

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However, it is perhaps best known in the West, as the operator of the endlessly controversial Corrib Gas project; but as its long history around the world has shown, controversy is no stranger.

John Lynch: PUBLISHED 30/05/2016 | 02:30

The latest recession in the oil sector has thrown up some truly remarkable business paradoxes.

Imagine, if you can, a company which suffers a $200bn plunge in revenues and sees its operating profits collapse by 93pc.

Imagine that company surviving such a life-threatening trauma but being resilient enough to get stuck into the acquisition of a serious competitor.

Well, that’s been the precise up-to-date experience of Royal Dutch Shell (Shell). And the rival it picked up amidst all its woes is BG plc. But then oil companies are a law unto themselves and some can afford to ship revenue and profitability damage, which would be fatal for most other corporations.

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Shell Cuts 2,200 More Jobs to Withstand Lower-For-Longer Oil

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Screen Shot 2016-05-21 at 10.18.28By Rakteem KatakeyMay 25, 2016 — 11:19 AM BST

Royal Dutch Shell Plc will cut 2,200 more jobs, taking the total tally of losses to 12,500 from 2015 to 2016 as the world’s second-biggest oil company continues to adjust to the slump in prices. 

At least 5,000 jobs will be cut this year, the company said in an e-mailed statement. These reductions are in response to oil prices staying “lower for longer,” and as a result of the acquisition of BG Group Plc earlier this year, said Paul Goodfellow, Shell’s vice president for the U.K. and Ireland. 

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Shell boss Ben Van Beurden spared shareholder pay revolt

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Jillian Ambrose24 MAY 2016 • 3:17PM

Shell shareholders have approved plans to pay boss Ben Van Beurden £4.3m despite calls from top proxy advisors to vote against his bonus ahead of the oil major’s AGM.

Investors voted 85.83pc in favour of the payout at the meeting in The Hague today.

Mr Van Beurden’s pay packet includes a salary of £1.4m, a bonus of £3.5m, and a pension of £441,000 for 2015, despite Shell reporting its steepest losses in 13 years and a planned job cull of 10,000. He has also received shares worth £9.7m, which vest in three years if he meets key performance targets.

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Shell faces rising investor discontent over executive pay

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Screen Shot 2016-05-12 at 11.17.55By REUTERSPUBLISHED: 16:01, 24 May 2016

By Ron Bousso

THE HAGUE, May 24 (Reuters) – Investor discontent with Royal Dutch Shell over multi-million euro pay packages for its top executives rose sharply at this year’s annual shareholder meeting on Tuesday.

Although Shell’s shareholders approved the oil and gas group’s remuneration report, including chief executive Ben van Beurden’s 5.14 million euros ($5.74 million) package, 14.17 percent of investors opposed it, up from 3.84 percent last year.

Royal London Asset Management, which holds Shell shares worth nearly 1 billion pounds, said it was “disappointed” that van Beurden received very close to the maximum possible bonus in a year when the firm’s overall financial performance was weak.

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Shell shareholders vote in favour of CEO’s $5.8-million pay

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THE HAGUE — Reuters: Tuesday, May 24, 2016: 7:40AM EDT

Royal Dutch Shell shareholders on Tuesday voted overwhelmingly in favour of Chief Executive Officer Ben van Beurden’s 2015 remuneration of €5.14-million ($5.8-million U.S.).

His total package, including pension and tax equalization, was €5.58-million, down from 24.2 million the previous year, mainly due to a significant fall in pension which had been boosted in 2014 by van Beurden’s promotion to chief executive.

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