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Shell 1Q Beats Consensus On Improved Oil, Gas Output


28 APRIL 20010 By James Herron Of DOW JONES NEWSWIRES

LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB.LN) Wednesday posted a consensus-beating 60% rise in adjusted profit for the first quarter due to higher oil prices and output that grew much faster than expected.

“We are making good progress in improving our near-term performance, delivering a new wave of production growth,” said Chief Executive Officer Peter Voser. “Our results reflected the successful ramp-up of our new upstream projects in Russia and Brazil, supporting a 6% increase in our production.”

The Anglo-Dutch energy company said the clean current cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, was $4.82 billion in the three months ended March 31, compared with $3.01 billion during the same period a year earlier.

This was well above expectations of $3.98 billion in a Dow Jones Newswires poll of 12 analysts.

Total oil and gas production was 3.594 million barrels of oil equivalent a day, an increase of 5.8% on the year as new projects started in Brazil and Russia. Analysts were expecting production to rise 0.2%.

Shell has beaten all expectations, said ING analyst Jason Kenney. Performance is stronger than expected, “across the board, in upstream and downstream,” he said. Oil and gas production is well ahead of analysts’ estimates and, “significantly improved LNG sales appear to be behind it,” he said.

Liquefied natural gas sales were up 38% on the first quarter of 2009, “reflecting the successful ramp-up in sales volumes from Sakhalin II LNG and improved volumes from Nigeria LNG,” Shell said. Total natural gas production was up 12%, far outstripping the increase in crude production, which rose just 1%.

Shell’s refining and marketing division also showed a surprisingly strong swing back into profit. From an adjusted loss of $427 million in the fourth quarter of last year, which is widely seen as having been the nadir of the refining industry, Shell posted an adjusted profit of $778 million this quarter.

Net profit for the quarter totaled $5.48 billion, up 57% from $3.49 billion a year ago.

Group revenues were $88.03 billion, compared with $59.44 billion in the second quarter of 2009.

Diluted earnings per share were 89 cents compared with 57 cents the previous year.

Shell B shares closed at 1,922 pence Tuesday, up 25.7% over the past 12 months as the oil price has rebounded.

Company Web site:

-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected]

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