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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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How electric cars could smash BP plc and Royal Dutch Shell plc



By Harvey Jones – Tuesday, 18 October, 2016

Investors in UK-listed oil giants (LSE: BP) and Royal Dutch Shell (LSE: RDSB) have been paying close attention to the oil price because they know that unless it climbs higher, their juicy 7%-plus dividend yields will be in jeopardy. However, they need to look to more distant horizons, because even if the oil price does climb a little higher this year, the long-term outlook is mixed.

Golden years

I’ve always thought ‘black gold’ to be a rather daft a description for oil, given that gold has few practical uses but the global economy runs on crude. However, that may not always be the case, due to the rise of electric vehicles and renewable energy. A new report from the World Energy Council suggests these two trends could hit demand for oil sooner and harder than expected. Oil consumption could actually start falling within the next 10 to 15 years and if correct, this would play havoc with the investment case for BP and Shell.

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Royal Dutch Shell: The Turnaround Will Continue



screen-shot-2016-10-06-at-13-11-55Alpha Investor: 12 October 2016


Royal Dutch Shell shares have received a boost in the past month on the back of an improvement in oil prices, a trend that is likely to continue.

There was excess oil demand of 500,000 bpd in the third quarter as against supply due to production cuts across the globe and robust demand, leading to an inventory correction.

Oil prices will rise further as Saudi Arabia, Russia, and the U.S. are all intent on reducing the industry oversupply, which will lead to further inventory declines.

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Shell, BP Hold Lure of Higher Payouts After Brexit Hurts Pound

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screen-shot-2016-10-06-at-13-11-55By Rakteem Katakey: October 12, 2016

The British pound’s slump to a 30-year low is handing a windfall to U.K.-based shareholders of Royal Dutch Shell Plc and BP Plc.

The currency’s decline means the two oil companies are making higher payouts to U.K. investors when they distribute their dollar dividends in pounds. Shell and BP have pledged to prioritize defending their dividends through oil’s biggest downturn in a generation.

The companies have maintained their payouts for the past two years and shareholders who have stayed invested through crude’s slump are likely to get additional cash in the U.K. currency as the pound remains weak following Britain’s June 23 decision to exit the European Union. The potential for higher cash payouts is driving up the companies’ London-listed shares. U.S. investors get no benefit from the currency’s more than 17 percent slide against the dollar in the period, which makes the pound the worst performer among major currencies.

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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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Now could be the perfect time to sell Royal Dutch Shell plc



By Royston Wild – Friday, 7 October, 2016

Stakeholders in fossil fuel goliath Royal Dutch Shell (LSE: RDSB) could be forgiven for breaking out the bubbly following the company’s recent share price detonation.

Shell saw its value gallop 28% higher during the third quarter, and the firm’s meteoric ascent may not be finished yet — indeed, the stock is within striking distance of July’s quarterly peak of £21.48 per share, the loftiest level since May 2015.

But while many momentum investors may be tempted to plough in, I reckon now could provide a terrific opportunity for investors to cash out.

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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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Nasdaq: Shell Shuts Down Nigerian Oil Pipeline Post Fire Outbreak

cropped-Screen-Shot-2016-09-09-at-20.58.10.jpgNasdaq: Shell Shuts Down Nigerian Oil Pipeline Post Fire Outbreak

September 30, 2016, 09:45:00 AM EDT By Zacks Equity Research

Integrated energy major Royal Dutch Shell plc’s RDS.A Nigerian division, Shell Petroleum Development Company, has shut down its Trans Niger Pipeline at Gio in Ogoni due to a recent fire. This pipeline feeds into Nigeria’s strategic Bonny Export Terminal.

Predictably, the commodity price slump has adversely affected Shell’s financials, particularly at its upstream unit. Furthermore, Shell’s revenues, earnings and cash flow have been significantly hurt by weak natural gas prices . Attacks on the company’s local establishments by the Nigerian militants have added to its woes.

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Is OPEC’s Output Deal A Game Changer For Royal Dutch Shell And BP?

Is OPEC’s Output Deal A Game Changer For Royal Dutch Shell And BP?

Royston Wild: Sept 29, 2016

Investors in the fossil fuel sector have finally had cause to celebrate this week after OPEC suggested that an output freeze could finally be in the offing.

The idea had initially been tabled at the start of the year as Saudi Arabia, Qatar, Venezuela and Russia got around the table. But Iran’s determination to get the pumps ramped back up to pre-sanction levels put the plan firmly on the backburner.

However, with Tehran’s reluctance to take part in a deal now apparently thawing, stock pickers have become more optimistic over the growth outlook for many of the oil industry’s major players.

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Shares in oil giants BP and Shell surge on production cut deal

Shares in oil giants BP and Shell surge on production cut deal

The agreement by OPEC countries boosts hopes for a sector which has seen mass job cuts, but could push up prices at the pump.

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Thursday 29 September 2016

Shares in Royal Dutch Shell and BP have surged after top oil producing countries agreed to cut production for the first time in eight years.

Shell climbed 6% and BP was up 4% following the decision by OPEC – with other commodity firms also performing strongly.

The stocks helped the FTSE 100 Index turn 1% higher, with improvements also seen in French and German markets, following an upturn for Asian shares overnight.

OPEC’s agreement on Wednesday helped the price of a barrel of Brent crude climb above $49 overnight, before slipping back slightly.

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Shell’s 70-year dividend record at risk


By Lee Wild | Thu, 22nd September 2016

Running an income fund has been fairly straightforward for the past few years. Drug giants like GlaxoSmithKline (GSK) and AstraZeneca (AZN) have kept up shareholder returns and the telecoms sector has offered rich pickings. So have BP (BP.) and Royal Dutch Shell (RDSB). However, income plays are becoming more expensive, and now we’re hearing that Shell’s dividend record is in serious danger.

Shell has not cut the dividend since the Second World War; it’s a fact we love to repeat whenever the conversation turns to the oil sector and dividends. And, despite a 55% rally since late January, the shares still offers a prospective dividend yield of 7.3%.

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Low oil forces Shell Houston reshuffle




Written by Rita Brown – 21/09/2016 7:00 am

screen-shot-2016-09-09-at-20-58-10Shell has made plans to move the bulk of its staff out of its historic Houston base.

The company informed staff that more than 3,400 workers would be relocated from its base in the Houston Central Business District to its facilities on the west side of the city.

Shell’s base, known as One Shell Plaza, was completed in 1971. At the time it was the tallest tower in the city. A spokesperson confirmed that only staff in trading will remain at site, which makes up part of the downtown Houston skyline.

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Shell and BP have lost billions – now the low price of crude is hurting other firms too



Oil is slowly climbing back to $50 a barrel as a deal between Saudi Arabia and Russia and an agreement on production in Venezuela helped to stabilise prices.

The production agreements could finally give some assurances to dozens of companies who have suffered since crude slumped from $114 a barrel in 2014 to $28 early this year.

Oil supermajors such as BP and Shell have been high-profile casualties, losing billions in profits.

They’ve written off billions of pounds and have had to slash tens of thousands of jobs as they change their businesses to cope with the reduced profits.

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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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Why I’m expecting Royal Dutch Shell plc and BP plc to plummet!

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By Royston WildThe Motley Fool: Friday, 2 September, 2016

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Investor appetite for the oil segment has taken a knock in recent weeks as fears of a prolonged supply glut have weighed.

British majors Royal Dutch Shell(LSE: RDSB) and BP(LSE: BP) have seen their share prices slip 10% and 7% respectively during the past six weeks, for example. And I believe a sharper retracement could be just around the corner.

Stocks keep surging

Broker predictions that the oil market is set to balance later this year are being put under increased scrutiny as already-plentiful stockpiles continue to build.

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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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Why I’ve sold all of my Shell and BP shares, by manager of £543 million

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Screen Shot 2016-07-29 at 16.46.22Bailey concluded his comments with the remark that the Shell dividend is uncovered. That means the company is not generating enough cash to pay the dividend itself.

David Thorpe 25 Aug 2016

Stephen Bailey, who runs the Liontrust Macro Equity Income fund has revealed the reasons why he has sold all of his shares in Shell and BP.

He began selling his Shell shares about a year ago, and completed the sale, ‘during the month of August’ 2016.

Bailey commented, ‘A year ago we had 9 per cent of the fund in oil, now it’s zero. You have to look at the macro view on this, and be very concerned about the oil market. The big suppliers in the market can no longer be controlled by OPEC, the Saudis recently announced an initiative called project 2030 which is aimed at boosting other areas of the economy, and they are doing that because they expect to receive less revenue from fossil fuels in the future.’  

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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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Largest Oil Companies’ Debts Hit Record High

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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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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.


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


  • 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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