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CityWire.co.uk: Shell draws a blank after drilling several unsuccessful wells

CityWire.co.uk: Shell draws a blank: “after drilling several unsuccessful wells”

By Dylan Lobo, Market Reporter

Posted 3 July 04

Shell faces a charge of £182 million in the second quarter after drilling several unsuccessful wells and completing extensive geological studies.

The failed wells were joint ventures with Enterprise Oil and include wells drilled in the North Sea and offshore Ireland. Shell (SHEL) said that reserves would be unaffected by the charge.

Shell offset the charge with news of the $530 million (£293 million) sale of Midwest refined product pipeline system and storage assets in the US to Buckeye Partners. The group also plans to sell its Peruvian service station network and industrial and marine fuels businesses.

Additionally, Shell was given the green light to explore the Pohokura gas field in New Zealand in which it has a 48% stake.

Shell said that the combined financial effect of the charges and the disposals is neutral. Shares in Shell were down 1.5p to 403.25p as investors digested the mixed news.

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