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Shell 1Q Adjusted Profit Soars 30% To $6.29B On Higher Oil Price

APRIL 28, 2011 3:15 A.M. ET


LONDON (Dow Jones)–Royal Dutch Shell PLC (RDSB.LN) Thursday posted a consensus-beating 30% rise in adjusted profit for the first quarter, as high oil prices, upstream production growth and continued cost-cutting all combined to good effect.

“We continue to make good progress in implementing our strategy, improving near-term performance, delivering a new wave of production growth, and maturing the next generation of growth options for shareholders,” said Chief Executive Peter Voser.

Shell 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 $6.29 billion in the three months ended March 31, compared with $4.82 billion in the first quarter of 2010. This was above expectations of $6.11 billion in a Dow Jones Newswires poll of nine analysts.

Total oil and gas production was 3.504 million barrels of oil equivalent per day, a decline of 2.5%. Shell produced greater volumes in the first quarter of 2011 compared with last year in Nigeria and Middle East/North Africa, according to data from the company. But the company reported drops in Europe in oil and gas, according to the data.

The Anglo-Dutch energy company has posted some impressive headline profit numbers for the first quarter, said ING analyst Jason Kenney. Its exploration and production division underperformed slightly compared with expectations, but downstream was impressive, he said. There are some questions about whether the strong downstream performance is sustainable and how much longer the costly ramp up of Shell’s major new projects will take, Kenney added.

Net profit for the quarter totaled $8.78 billion, up 60% from $5.48 billion a year ago.

Group revenues were $114.84 billion, compared with $88.03 billion in the first quarter of 2010.

Diluted earnings per share were 1.42 cents compared with 89 cents the previous year.

Shell B shares closed at 2,317 pence Wednesday.

-By Alexis Flynn, Dow Jones Newswires; +44 (0)20 7842 9471; [email protected]

(James Herron in London contributed to this report.)


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