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Shell Reports Higher Q3 Earnings on Oil Prices

By Eduard Gismatullin – Oct 27, 2011 8:25 AM GMT+0100

Royal Dutch Shell Plc, Europe’s biggest oil company, said third-quarter profit doubled as energy prices rose and it ramped up projects from Qatar to Canada.

Net income increased to $7 billion from $3.5 billion a year earlier, The Hague-based Shell said today in a statement. Excluding one-time items and inventory changes, earnings beat analyst estimates.

Chief Executive Officer Peter Voser is seeking to boost output with a $100 billion investment plan through 2014, including the Pearl gas-to-liquids and Qatargas 4 liquefied natural-gas projects and an upgrade at an oil-sands project in Alberta. Shell has sold about $6.2 billion of assets this year, exceeding a $5 billion target.

“We are making good progress against our targets, to deliver a more competitive performance,” Voser said in the statement.

Adjusted earnings of $7 billion compared with the $6.6 billion mean estimate of 12 analysts surveyed by Bloomberg.

Shell’s Class A shares in London rose as much as 2.6 percent and were at 2,305 pence as of 8:08 a.m. local time. The stock is up 7.7 percent this year.

Earlier this week, BP Plc also reported profit that beat analyst estimates and increased an asset sales target by 50 percent to $45 billion. Statoil ASA, Norway’s biggest energy producer, said today that output rose for the first quarter in five as earnings fell on higher taxes. Exxon Mobil Corp., the largest U.S. oil company, will report results later today.

LNG Sales

LNG sales volumes increased 12 percent to 4.76 million tons from the year-earlier quarter, Shell said.

Overall production fell 2 percent to 3.012 million barrels of oil equivalent a day. New fields contributed about 270,000 barrels of oil equivalent a day.

Shell’s cash flow benefited from a 33 percent gain in U.K. gas futures and a 46 percent increase in Brent oil prices from the year-earlier quarter.

Shell received its first contribution from a $12 billion biofuels joint venture with Cosan SA Industria & Comercio in Brazil, it said today. It was involved in two exploration discoveries in French Guiana and Australia. Shell also secured new exploration projects in the Americas, Tanzania and New Zealand.

Of the 31 analysts that cover Shell, 24 recommend buying the shares and seven have ‘hold’ ratings.

To contact the reporter on this story: Eduard Gismatullin in London at [email protected]

To contact the editor responsible for this story: Will Kennedy at [email protected]

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