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Royal Dutch Shell Breaking News 31 Jan 2017

Links below are to some of the current news stories posted on our sister website royaldutchshellgroup.com covering, among other developments, an article published today by The Wall Street Journal under the headline: Corruption Currents: Nigeria to Charge Shell, Eni in Oil-Graft Scandal.

There is also news that Shell has sold a stake in a Thailand gas field and is selling more North Sea assets, all part of the fire sale necessary for funding the takeover of the BG Group. Also, some previews of Shell’s imminent fourth quarter results. read more

Royal Dutch Shell PLC saddled with a mountain of debt


By John Donovan

The Wall Street Journal does not mince its words.

In an article published today, it says that Shell has saddled itself with a mountain of debt as a result of its takeover of the BG Group.

Article author Sarah Kent points out Shell’s  debt-to-equity ratio is far higher than its major rivals.

The same concern is expressed in a related Wall Street Journal article: Shell’s New Year Promise: Slimming Down

Although Shell promised to offload $30 billion of assets, it has thus far sold only $5 billion worth. read more

Royal Dutch Shell close to selling North Sea and Gabon assets

by: Andrew Ward, Energy Editor

Royal Dutch Shell is closing in on asset sales in the North Sea and Gabon that will increase confidence that its $30bn asset disposal programme is gaining momentum.

The Anglo-Dutch energy group announced on Monday that it had completed the $1.4bn exit from its Japanese refining joint venture, Showa Shell, locking in an important part of the $5bn of divestments agreed so far.

However, the potential deals in the North Sea and Gabon pose a bigger test for Shell… read more

Japan’s Idemitsu buys 31.3 percent of Showa Shell from Royal Dutch Shell

Japanese refiner Idemitsu Kosan Co Ltd (5019.T) said on Monday it has completed its planned acquisition of 31.3 percent of rival Showa Shell Sekiyu KK (5002.T) from Royal Dutch Shell PLC (RDSa.L).

Earlier in the day, Japan’s anti-monopoly regulator approved Idemitsu’s plan to acquire the stake.

In a filing at the stock exchange, Idemitsu said it paid 1,350 yen a share, or a total of 159 billion yen (1.08 billion pounds).

The refiner had originally planned to buy 33.3 percent from Royal Dutch Shell. read more

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

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By Ron Bousso | LONDON

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

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

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

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

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Oct. 21, 2016 10:17 AM ET

Summary

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

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

Shell Sells Malaysia Offshore Fields

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12 October 2016

Royal Dutch Shell is reportedly selling its participation in various offshore fields in Malaysia, according to media sources.

The supermajor has allegedly signed a deal with Hibiscus Petroleum to sell its 50% stake in the 2011 North Sabah Enhanced Oil Recovery production sharing contract (PSC), which includes four fields and associated infrastructure.

“This is a significant milestone for Hibiscus Petroleum. When we created Hibiscus Petroleum, this was our goal, to invest in Malaysia and to apply our knowledge and experience to create value in our own backyard,” Hibiscus Petroleum Managing Director, Kenneth Pereira, said. read more

Royal Dutch Shell: An Unsustainable Dividend

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Jesse Moore: Sept 15, 2016

Summary

  • Shell is funding its dividend and capital expense programs through a combination of debt and asset sales.
  • Those assets are operating, economic assets that provide long-term value to the company under its assumptions.
  • Shell has one year of leeway at current prices to fund its dividend after that rising debt will put too much pressure on the companies balance sheet.
  • Since I have a negative outlook on prices till at least 2018, I expect a Shell dividend cut in the first half of 2017.
  • Adding to the long list of resource companies with debt-funded dividends, we have Royal Dutch Shell (RDS.A, RDS.B). With a current yield of nearly 8%, and assuming you knew nothing about oil and gas, you could reasonably conclude this company is in peak operating condition. Unfortunately for investors, that story would be far from true.

Capital Expense – Free Cash Gap Growing

Many Shell investors focus on the stability of the dividend as a hallmark of the stock. Those investors are seemingly immune to what the balance sheet, cash flow statement tell us. As the company has pushed towards gas and is being pushed by its investors towards renewables, the capital expense bills have piled up. Throughout the oil downturn, Shell has hardly reduced capital expense in line with free cash flow – a result of long-term project planning that cannot be reined in. read more

Shell leaves refinery business in Denmark

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By Daniel J. Graeber     |   Sept. 15, 2016 at 8:36 AM

COPENHAGEN, Denmark, Sept. 15 (UPI) — For about $80 million in capital, Royal Dutch Shell said Thursday it was keeping its upstream Danish interests in check, but unloading a refinery operation.

Shell said it reached an agreement with a Danish company to sell its refinery operations, which includes the Fredericia refinery that has the capacity to handle 70,000 barrels of product per day. The Dutch supermajor said its exploration and production interests in Denmark would not be impacted by the transaction. read more

Shell’s U.S. oilfield sale may bode well for disposal program

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…analysts also say further deals may prove harder to clinch

Aug 30 2016, 11:47 ET | By: Carl Surran, SA News Editor

Analysts say Royal Dutch Shell’s (RDS.A, RDS.B) first oilfield sale after its BG Group acquisition bodes well for its sale talks in the North Sea, Gabon and New Zealand, signaling that buyers will meet the company’s expectations on value.

The $425M sale of the Brutus/Glider fields has an implied oil price of ~$60/bbl, more than $10/bbl above current prices, according to UBS analysts who say “we may now be entering a period where both buyer and seller can see acceptable relative value, unlocking the A&D [acquisition and divestiture] market.” read more

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. read more

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. read more

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