Royal Dutch Shell Plc  .com Rotating Header Image Lowland backs Shell’s recovery Lowland backs Shell’s recovery

Published: 12:04 Mon 10 May 2004

By Algernon Craig Hall, Secret Buying Correspondent

James Henderson, the shrewd manager of Lowland investment trust, has bought into oil giant Shell following share price falls caused by the recent reserves scandal that has shaken the group to the core.  

Henderson told Citywire: ‘I just think the bad publicity has bought the price back too far.’

Henderson recently picked up 250,000 shares for Lowland, the second best performing UK growth and income trust over five years. It now holds 900,000 shares.

The company’s shares and its credibility have been deeply shaken by revelations of a high level cover up to make investors think its reserves position was stronger than it really was. Regulators in the US and UK are both investigating.

However, Henderson, who bought at prices just over 350p, has taken a philosophical view on the debacle. He said: ‘It’s gushing cash if not oil.’

Shell, which has re-categorised 4.35 billion barrels of its proven oil reserves as unproven since the start of the year, recently underlined its cash generative nature by announcing a buy back programme as well as increased investment in exploration.

The buy backs, which were announced at the same time as bumper first quarter profits, look like a canny move by management to switch investors’ attention away from the scandal and back onto the underlying business.

Henderson also takes the view that there is still a good chance that the re-categorised unproven reserves will be pumped from the ground.

Henderson seems less concerned about recent events than many of his peers. It is encouraging for investors tempted by Shell’s recovery prospects to see such a successful contrarian buy.

Unfortunately for shareholders the ongoing investigations by regulators mean that the odour of scandal is unlikely to die away too quickly. Henderson reckons the worst of it should be over though. He said: ‘These stories move on and people have had their go.’

Lowland’s NAV has risen 22% over the last five years and is up 33% over the last year. It shares currently trade at a 3% premium to NAV compared with an average sector discount of 8%. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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