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Leak reportedly shuts Nigeria’s Trans Niger Pipeline

Jun 10th, 2016
by John Donovan.
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Jun 9 2016, 17:26 ET | By: Carl Surran, SA News Editor

Nigeria’s Trans Niger Pipeline, one of two major pipelines that carries the Bonny Light crude grade for export, was shut down yesterday after a leak was found, Upstream reports.

Royal Dutch Shell (RDS.A, RDS.B), one of TNP’s partners, confirmed that the pipeline had shut down but declined to comment further; the other partners are Total (NYSE:TOT), Eni (NYSE:E) and Nigerian National Petroleum Corp.

The shutdown comes just as repairs were completed on the Nembe Creek Trunk Line that also moves Nigeria’s major export grade. read more

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What Caused Royal Dutch Shell’s Shares To Soar

Jun 9th, 2016
by John Donovan.
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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%. read more

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Royal Dutch Shell Under Pressure As It Seeks To Divest North Sea Assets

May 20th, 2016
by John Donovan.
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Summary

Royal Dutch Shell reportedly testing the waters for its $30 billion divestiture plan.

Most of the assets are located in the North Sea.

What will potential buyers be looking at?

Weak selling environment could result in company retaining some assets.

Gary Bourgeault: May 19, 2016 5:35 PM ET

After its $54 billion acquisition of BG Group, Royal Dutch Shell Plc (NYSE:RDS.A) (NYSE:RDS.B) had its credit rating cut after the huge increase in debt. Now it has reportedly entered into talks with interested parties in order to raise about $30 billion from the sale of assets, according to Bloomberg, citing sources not wanting to be identified.

The report said the bulk of the assets in question are from the BG acquisition, with the majority of the assets located in the high-cost North Sea region. In March, other unidentified people said Shell was also shopping assets in India and Trinidad and Tobago, along with the U.S. pipelines. read more

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Dividends On A Knife-Edge: Royal Dutch Shell And BG Group

Feb 20th, 2016
by John Donovan.
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Extracts from an article by Nigel Kelly: 19 FEB 2016

Summary

RDS acquired BG Group on February 15, 2016.

The BG shares have been delisted.

RDS/BG now yields over 7.5%.

$60B is required Annually to cover Capex, Debt, Dividend and other Cash Commitments.

Its Cashflow from Operations is only $30B.

Background

Royal Dutch Shell completed its acquisition of BG Group on Feb 15th 2016. The full year 2015 results for both companies have been released in recent weeks. I wanted to review the full years earnings reports and assess the dividend safety for the combined entity. read more

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Will Royal Dutch Shell Eliminate Its Dividend This Year?

Jan 15th, 2016
by John Donovan.
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Screen Shot 2015-11-20 at 08.55.47Extracts from an article by Lior Cohen: JAN 14, 2016

Shell’s stock shed 10% off its value over the last month, as the price of oil dwindled.

Following this fall, the dividend yield is currently at 9.4% – a historic level.

Some investors think that because the company paid and raised its dividend since WW2, it means it won’t deviate at this stage. But let’s not forget that times are changing. And if Shell were to face say a Gulf of Mexico oil spill as BP (NYSE:BP) encountered back in 2010, you can bet the dividend will be eliminated in a heartbeat – especially in times of low oil prices. But even without a major oil spill, the current oil price environment stresses Shell’s cash reserves. read more

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Is Royal Dutch Shell A Buy At 52-Week Lows?

Jan 12th, 2016
by John Donovan.
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Extracts from an article by Mihir Mehta: 11 Jan 2016

Summary

Shell has had a bad start to 2016 and is trading close to its 52-week low, but investors should not consider this as an opportunity despite a strong balance sheet.

Shell’s strong balance sheet is overshadowed by the fact that its gross margin has declined and leverage has increased as compared to big oil players such as Exxon and Chevron.

Shell’s leverage growth of 32% is almost four times higher than BP’s leverage growth, indicating that its interest burden has increased at a faster pace than rivals. read more

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Some Thoughts On Royal Dutch Shell’s Dividend In 2016

Nov 25th, 2015
by John Donovan.
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Screen Shot 2015-11-20 at 08.55.47Casey Hoerth, Casey’s Finance Journal (Blog) : Nov. 25, 2015 

Summary

Shell expects substantial cost savings and capex cuts in 2016.

Dividend sustainability in 2016 will depend on Brent crude prices.

At this time, I prefer companies that can actually acquire with oil at these prices.

Back in April, I wrote that Royal Dutch Shell’s (NYSE:RDS.A) dividend, while sustainable in the short term, would be hard to maintain in the long run if crude oil prices remained as low as they were. From what we’ve seen since April, it looks as if crude indeed wants to remain lower for longer.

Just last week, Shell had its Investor Day for 2016, where the company explained its vision for the coming year. This time around, the company didn’t center its presentation on full-year cash flow guidance for 2016. That’s because crude prices have been volatile to the point of full-year guidance being less than valuable. That, in turn, makes it difficult to get a handle on dividend sustainability for next year. This article focuses on a few things important to the company’s dividend: cash flow and capital expenditures. read more

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Western oil groups warn Nigeria against overhaul of contracts

Oct 12th, 2015
by John Donovan.
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Western oil executives are warning Nigeria against major changes to commercial contracts that could lead to the government taking a bigger share of revenues from the country’s deepwater fields, FT reports.

The decision – which the government says will affect Royal Dutch Shell (RDS.A, RDS.B), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM), Eni (NYSE:E) and others “in the weeks and months ahead” – has sparked concern among execs who say they know nothing of the details are have not been contacted. read more

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Cash-strapped Nigeria to renegotiate contracts with oil majors

Sep 17th, 2015
by John Donovan.
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Screen Shot 2015-07-31 at 19.22.09By: Carl Surran, SA News Editor: Sept 16, 2015

Nigeria’s state oil company says it plans to renegotiate production sharing agreements with oil majors including Royal Dutch Shell (RDS.A, RDS.B), Chevron (NYSE:CVX), Exxon Mobil (NYSE:XOM) and Eni (NYSE:E), as the country has been hit hard by the plunge in global oil prices.

“Some of the contracts were negotiated over 20 years ago and they have since been overtaken by new realities in the industry,’’ says Ibe Kachikwu, the new head of the Nigerian National Petroleum Corp.

Nigeria is Africa’s top producer of crude oil and gets 70% of its government revenues from oil. read more

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Shell CEO says only ‘something cataclysmic’ could stop BG deal

Sep 10th, 2015
by John Donovan.
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Sep 9 2015, 14:43 ET | By: Carl Surran, SA News Editor

Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden has told investors privately that only “something cataclysmic” – i.e., “if people stopped using energy” – could derail the company’s planned takeover of BG Group (OTCPK:BRGXF, OTCQX:BRGYY), WSJ reports.

The episode is among the latest attempts by top Shell execs to sell investors worried that the deal may fall through; BG shares trade at a discount to the Shell cash and share offer, concerns that Australian and Chinese regulators could set high hurdles and, more broadly, that the persistently low oil prices could yet lead Shell to rethink the merger are dampening sentiment. read more

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How Royal Dutch Shell Is Addressing Its Dividend Concerns

Sep 3rd, 2015
by John Donovan.
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Screen Shot 2015-08-04 at 22.49.59Christopher F. Davis: Sept 3, 2015

Summary

  • This article is a follow-up to my prior article addressing the company’s dividend concerns.
  • History won’t always repeat itself, so I felt I would talk about what the company is doing in detail and expand on my thoughts.
  • I am betting history continues.

As you know, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) has been crushed in the last three months, and of course, over the last year since oil began its sell-off. At the time of this writing, oil is hovering around $40 and oil stocks have come off of their lows from last week. However, it could get worse before it gets better. Last week I wrote an article that addressed the Royal Dutch Shell dividend concerns. It was a highly controversial article, to tell you the truth. But it is important. The stock has a 7.5% yield right now. It did NOT raise its dividend to get here. It is not a red flag dividend. It is a result of rampant selling in the oil sector. read more

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Royal Dutch Shell Is Now A 7.54% Dividend Yield Monster

Aug 26th, 2015
by John Donovan.
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Screen Shot 2015-08-13 at 11.35.25Aug. 24, 2015 6:45 PM ET

Summary

  • Stock market downturn takes Shell’s dividend yield to an astonishing 7.54%.
  • The dividend looks reasonably safe.
  • High initial yield but little growth expected in coming years.

Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) doesn’t need an introduction. This Anglo-Dutch multinational is one of the largest, integrated oil & gas majors in the world. Its share price has dropped nearly a quarter since the start of the year, pushing its dividend yield ever higher. While commonly regarded by many DGI investors as lesser quality than Exxon Mobil (NYSE:XOM), I believe the current market situation highly favors including this stock in the energy component of your dividend portfolio. read more

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Arctic drilling not consistent with Obama climate change fight, report says

Aug 14th, 2015
by John Donovan.
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Arctic drilling not consistent with Obama climate change fight, report says

Screen Shot 2015-08-13 at 11.35.25By: Carl Surran, SA News Editor

  • The Obama administration’s crusade against climate change is “inconsistent” with allowing Royal Dutch Shell (RDS.A, RDS.B) to drilling for oil in the Arctic Ocean, environmentalists warn in a new report.
  • Pres. Obama has said he will consider climate change implications in deciding whether to permit the Keystone XL pipeline that would help ferry Canadian oil sands crude to U.S. refineries, and Greenpeace and Oil Change International argue the same climate test should be applied to other fossil fuel projects such as Arctic drilling.
  • Energy demand models stressing “multiple sources of energy” are flawed too, according to the report, which argues that the Energy Information Administration long-term outlook depicts a scenario that would boost temperatures by at least five degrees celsius.
    • read more

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    Shell’s Dividend Pledge: Solid Or Empty Promise?

    Aug 5th, 2015
    by John Donovan.
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    One cannot but admire CEO Ben van Beurden for his courage…

    August 4, 2015

    Summary

    • Royal Dutch Shell is dead serious about protecting future dividend payments. CEO Van Beurden committed himself to paying attractive dividends in the next two years.
    • Although I am impressed by Shell’s massive cost reduction plans and the slash in investments, I believe the dividends are still not fully covered by future cash flows.
    • However, Shell’s strong balance sheet and the expected sale of non-core assets provide ample room for the company to keep distributing juicy dividends in the (near) future.

    One cannot but admire CEO Ben van Beurden for his courage. Amidst the biggest oil crisis since the early seventies, the CEO is very clear about Shell’s (RDS.A, RDS.B) dividend intentions.

    In a short clip on the company’s website, Van Beurden states that Shell is “committed to its dividend policy.” In an interview with Bloomberg, the CEO even calls dividends an “iconic aspect in Shell’s proposition to investors.”

    Those are not just empty words. To my knowledge, the company did something that it has never done before: given a strong guidance for the next seven quarterly dividend payments. Despite the “challenging market conditions,” Shell intends to pay a total dividend of $1.88 per share this year ($3.76 per share for the ADR). The company even expects to distribute at least $1.88 per share next year. read more

    This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

    Will China’s Ministry Of Commerce Block Shell-BG Deal?

    Jun 5th, 2015
    by John Donovan.
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    Jun. 4, 2015 3:15 PM ET

    Will China’s Ministry Of Commerce Block Shell-BG Deal?

    Summary

    • Shell-BG deal is likely to face most scrutiny in China.
    • MOFCOM is likely to approve the merger with conditions.
    • These conditions could involve both structural and behavioral remedies.

    Ever since Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) announced to acquire BG Group’s (OTCPK:BRGXF) natural gas assets and deep-water oil fields in a $70 billion deal, there have been concerns that the deal may be delayed, if not blocked, due to prolonged scrutiny from regulators around the world. While the deal could face potential hurdles in EU, Australia, China, and Brazil, I think it is unlikely to be blocked by any country. However, I think China is likely to raise majority of the concerns and therefore, I’m going to focus on China in this article. read more

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    Oil industry rebuts proposed Arctic drilling mandates

    May 29th, 2015
    by John Donovan.
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    Oil industry rebuts proposed Arctic drilling mandates

    May 28 2015, 18:58 ET | By: Carl Surran, SA News Editor

  • Oil companies and industry trade groups lash out against the Obama administration plan to require rigs and time to drill relief wells in case of emergencies at their operations in U.S. Arctic waters, claiming the proposed rules would shorten an already brief window for exploratory drilling while dramatically boosting the costs of the operations.
  • The group also says the proposal would lock in the “same-season relief well” requirement even though rapidly evolving technologies might be a better solution when companies lose control of an Arctic well.
  • Similar arguments were delivered today by Royal Dutch Shell (RDS.A, RDS.B) and Statoil (NYSE:STO), which both hold active leases in the Chukchi and Beaufort seas north of Alaska; ConocoPhilllips (NYSE:COP), another leaseholder in the area, filed comments that are not yet available.
  • A key sticking point is the same-season relief well requirement – not just the proposed rules for it, but whether it should be allowed in the first place; Shell is asking the Interior Department to replace the requirement with a mandate that oil companies demonstrate they have “assets that can address a source-control event.”
    • read more

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