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Shell and BP dividends at risk from oil price crash

Screen Shot 2015-01-05 at 16.43.46Extracts from CNBC Article by Katy Barnato published Mon 5 Jan 2015 under the headline: “BP, Shell dividends at risk from oil slump”

Screen Shot 2014-10-28 at 11.51.59“The risk is that given that these companies in the oil and gas sector account for 15 percent of the total payout, if the oil price remains low for a sustained period, this could become a risk…”

“At current levels the dividends (of BP and Shell) are not covered by free cash flow, meaning payouts need to be funded from debt…”

“If the oil price remains below $80 per barrel for more than one year, then CapEx (capital expenditure) budgets across the sector would need to be cut very aggressively in order to protect dividends.”


Extract from related article

Ryan Bransfield, head of dividend research at Markit… expects Royal Dutch Shell plc and BP plc to keep their dividend payouts throughout the year. However, he did say that there is a risk presented to dividend payouts if the price of oil continues to fall or maintain its low level.


Related just published Bidness Etc article:

“Citigroup Inc Downgrades Chevron Corporation”

Reports that the oil price crash is one of the reasons for the downgrade… and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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