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Shell Profit Hit by Weaker Oil, Gas Prices

By SELINA WILLIAMS

November 1, 2012

LONDON—Royal Dutch Shell RDSB.LN +0.66% PLC Thursday posted a 6.3% fall in profit for the third quarter, driven by weaker oil and gas prices and lower chemicals margins.

“Shell is driving a long-term and consistent strategy, against a backdrop of volatile energy markets,” said Chief Executive Peter Voser. “I am pleased with our progress in a difficult industry environment.”

The Anglo-Dutch energy company said its clean current cost of supplies—a keenly watched figure that strips gains or losses from inventories and other nonoperating items out from net profit—was $6.56 billion in the three months ended Sept. 30, compared with $7.00 billion in the third quarter of 2011.

This was above average expectations of $6.31 billion in a Dow Jones Newswires poll of 13 analysts.

Including a $1.01 billion gain on the value of inventories and a $423 million impairment mainly on natural gas assets in the U.S. and tax changes in the U.K., Shell’s net profit for the quarter was $7.14 billion, up 2.3% from $6.98 billion a year earlier.

Total oil and gas production was 2.982 million barrels of oil equivalent a day, a decrease of 1% from 3.012 million barrels of oil equivalent a day in the same period last year, due to asset sales, security problems onshore Nigeria and the impact of Hurricane Isaac on offshore operations in the Gulf of Mexico. Analysts were expecting production to rise 2% to 3.071 million barrels of oil equivalent a day.

Total revenue amounted to $115.43 billion, a decrease of 8.4% compared with $125.96 billion in the third quarter of 2011.

Diluted earnings per share were 114 cents, compared with 112 cents the previous year.

Write to Selina Williams at [email protected]

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