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

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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. read more

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. read more

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. read more

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? read more

Can we still be sure of Shell?

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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. read more

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. read more

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. read more

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. read more

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

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Reuben Gregg BrewerJul 22, 2016 at 1:16PM

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

Cash flow, not earnings

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

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. read more

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 read more

Oil Prices and the Brexit: What Just Happened

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IMAGE SOURCE: GETTY IMAGES.

By Matthew Dilallo: 24 June 2016

What: Crude prices tumbled on Friday after Britain’s stunning decision to leave the European Union. By mid-afternoon, oil was down 4.5% and back below $50 a barrel. The sell-off washed over into oil stocks, with British giants BP (NYSE:BP) and Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B) both following crude downward by more than 5% as of 12:30 p.m. EDT.

Those moves, however, were tame compared to the sell-offs of other European oil stocks, with Statoil (NYSE:STO) and Total (NYSE:TOT) down nearly 6% and 9%, respectively. Even large independent U.S. oil companies were taking it on the chin, with ConocoPhillips (NYSE:COP) just one among the many oil stocks sliding in parallel with the price of crude. read more

Royal Dutch Shell Set to sink?

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By Royston Wild – Saturday, 11 June, 2016

The possibility of protracted earnings pain also makes Royal Dutch Shell (LSE: RDSB) a gamble too far, in my opinion.

At face value, charging oil prices may be at odds with my bearish take on the state of the market. Indeed, the Brent index surged above the $52 per barrel marker for the first time since October this week, helped by supply disruptions in Nigeria and a weaker US dollar.

However, the long-term outlook for crude values remains on thin ice, in my opinion. Production from OPEC and Russia continues to blast higher, while patchy economic growth means that bloated inventory levels are likely to persist, a situation that could send black gold prices sinking again. read more

Will Royal Dutch Shell plc survive the oil crisis?

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By Peter Stephens – Monday, 6 June, 2016

With the price of oil having risen from $28 per barrel earlier this year to around $50 per barrel, many investors may feel as though the worst is now over. Certainly, such a rapid gain in the price of any asset indicates a step change in investor sentiment and looking ahead, the price of oil could rise yet further. However, with there being a major imbalance between the supply of and demand for oil, its price could easily come under further pressure in the short-to-medium term.

In such a situation, it may be prudent for investors to hold shares in oil stocks with sound financial backgrounds. One such company is Shell (LSE: RDSB), with it having a strong balance sheet and excellent cash flow. In fact, evidence of Shell’s financial strength can be seen in its acquisition of BG Group during the oil crisis. This indicates that Shell is very confident in its ability to survive a low-oil-price environment. And with it having a debt-to-equity ratio of just 41% even after the acquisition of BG, it seems capable of making further acquisitions in future. read more

Can This Troubled LNG Project Still Deliver for Chevron, ExxonMobil, and Royal Dutch Shell?

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By Jay Yao: Jun 4, 2016

Australia’s Gorgon LNG is one of the largest liquefied natural gas projects in the world. When complete, the Gorgon is expected to produce 15.6 million metric tons of LNG a year and last for 40 years. For Australia, the Gorgon was supposed to add hundreds of billions of dollars to Australia’s GDP and employ thousands of people. For the companies that invested, Gorgon was supposed to be one of the cornerstones of their LNG portfolios and deliver long-lasting shareholder value. read more

Royal Dutch Shell plc’s very existence is at risk according to management!

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By Rupert Hargreaves – Wednesday, 25 May, 2016

Shell’s (LSE: RDSB) Chief Executive Ben van Beurden shocked the market yesterday when he revealed that Shell’s dividend payments and even its very existence are under threat if the shift to renewables takes place too fast.

The group’s CEO made these comments at Shell’s annual meeting this week as 97% of the company’s shareholders voted to reject a resolution to invest profits from fossil fuels in becoming a renewable energy company. Speaking at the meeting, Ben van Beurden said: “We cannot [transition to renewables] overnight because it could mean the end of the company.” read more

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