Extract from a Reuters article by CLAIRE MILHENCH published 1 July 2014
Royal Dutch Shell Firesale
New infrastructure players to help UK North Sea in twilight years
One Reason Why I Wouldn’t Buy Royal Dutch Shell plc Today
Extracts from a Motley Fool article by Royston Wild published 26 June 2014
Shell has spun off a multitude of upstream and downstream assets in recent years in order to build its dividend and share repurchase-supporting cash pile and reduce its exposure to non-core assets. The oil giant also offloaded its Australian Geelong refinery and almost 900 pump stations in Australia to Vitol for $2.6bn back in February, and follows other downstream sales including that of its liquefied petroleum gas (LPG) operations in the Philippines late last year. The business has also offloaded upstream assets from the UK to Egypt and across Scandinavia over the past 12 months. The effect of this severe asset cutting caused total output during January-March to drop 9% to 3.3 million barrels of oil equivalent per day, and the company has hinted at further divestments to come.
Are Asset Sales the Answer for Royal Dutch Shell plc?
Extracts from a Motley Fool article by Arjun Sreekumar published 23 June 2014
On Monday, Shell announced the sale of a 19% stake in Woodside Petroleum, a deal that is expected to raise $5 billion. On Wednesday, the company announced that it had filed a registration statement with the U.S. Securities and Exchange Commission related to the proposed IPO of its pipeline subsidiary, which could raise up to $750 million. Due largely to ill-timed investments in U.S. shale, continued security issues at its Nigerian operations, and its beleaguered drilling program in Alaska’s Chukchi Sea, Shell’s return on capital employed, or ROCE, averaged under 15% from 2008 to 2012. Sales of under performing downstream and upstream North American assets are providing much-needed cash and should help the company gradually improve its return on capital. Overall, the combination of asset sales, reduced spending, and higher cash flow should allow Shell to grow its dividend at a stronger pace over the next few years, assuming commodity prices remain high and assuming that the oil giant can bring new projects online on time and on budget.
Shell Sells Eagle Ford Assets as Part of Global Repositioning
Extract from an Industrial Info Resources article by John Egan published 23 June 2014
Royal Dutch Shell plc is selling its acreage in the Eagle Ford Shale to Sanchez Energy Corporation for about $639 million, continuing the super-major’s asset sales and portfolio repositioning. Shell bought that acreage a few years back for an estimated $1 billion. Last summer, the super-major took a $2.1 billion write-down on the value of its Eagle Ford assets.
Making Shell more palatable as an acquisition target?
From a regular contributor
I think the Ho Ho line may be one of the assets being sold as part of the IPO announced today.
http://royaldutchshellplc.com/2014/03/08/shell-says-ho-ho-pipeline-shut-after-leak-in-texas/
Document filed with United States Securities and Exchange Commission 18 June 2014
On another subject completely….the Chinese have done a large scale LNG deal with BP and at the same time announced that their cooperation with Shell will continue. Shell promotes itself as the big LNG player, so why is this LNG deal going to BP? In spite of all the spin, Shell and CNOOC agreeing to continue cooperation is hardly an earth shattering event, so why does it justify so much coverage?
Shell to sell most of stake in Australia’s Woodside for $5.7 billion
Extracts from a Reuters article by Sonali Paul published Tuesday 17 June 2014
(Reuters) – Royal Dutch Shell launched a long-anticipated sale of most of its stake in Australia’s Woodside Petroleum Ltd on Tuesday, looking to reap about $5.7 billion as it moves to focus on developing its own gas assets in Australia. The selldown, which reduces Shell’s holding to 4.5 percent from 23.1 percent, removes uncertainty that has weighed on Woodside’s share price since Shell sold a third of its stake in 2010 and flagged it was not a long term holder. The sale, which came the week Woodside’s stock hit a three-year high, had been expected this year after Shell Chief Executive Ben van Beurden took the helm in January outlining plans to sell $15 billion worth of assets.
Essar to sell UK’s second-biggest refinery
Extract from a Financial Times article James Crabtree in Mumbai published 12 June 2014
India’s Essar Group plans to sell the British oil refinery it bought from Royal Dutch Shell for $350m in 2011, as the struggling conglomerate attempts to reduce debts and refocus on its core Indian business. “The truth is they should never have bought Stanlow, but Shell sold it on the cheap…”
Extract from Reuters EU Mergers & Takeovers Report published 12 June 2014
— Kuwaiti state oil group Kuwait Petroleum Corp to acquire Italian petroleum product companies Shell Italia SpA and Shell Italia Aviazione Srl from energy company Royal Dutch Shell (approved June 12)
Shell announces sale of Eagle Ford acreage, South Texas
21 May 2014
Royal Dutch Shell plc (“Shell”) announced today it has agreed to sell its 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas to Sanchez Energy Corporation for approximately $0.639 billion, subject to closing.
The sale includes approximately 176 operated producing wells and associated field facilities and infrastructure. Net production in Q1 2014 was approximately 24,000 barrels of oil equivalent per day, with approximately 60 percent crude and natural gas liquids.
Here’s Why Royal Dutch Shell is Walking a Dangerous Tightrope
Extracts from an article by Bob Ciura published 14 April 2014 by The Motley Fool
Heading into 2014, new Chief Executive Officer Ben van Beurden set rigorous capital discipline as his firm’s top priority. Over the past few years, Shell was led on an ambitious growth strategy that involved several high-profile resource acquisitions. Many of those decisions turned out to be ill-advised… Essentially, returns from new projects unimpressed, and cost over-runs were eroding margins. In response to dwindling returns and spiking costs, Royal Dutch Shell has embarked on a series of asset disposals this year, particularly on the downstream side of the business.
Oil Theft in Nigeria Continues to Plague Shell
Extract from an article by Arjun Sreekumar published on 28 March 2014 by The Motlet Fool under the headline: “Oil Theft in Nigeria Continues to Plague This Company”
Though one could argue that Shell, which has been operating in Nigeria for decades, should have sold its sabotage-prone Niger Delta assets long ago, at least the company is finally taking the necessary steps to address the situation. Its decision is shaped by Shell’s new “fix or divest” strategy, which seeks to either improve or unload underperforming businesses. The move should pan out to be a good one. Not only will it reduce the company’s exposure to continuing security concerns in Nigeria, it will generate much-needed cash to meet its $15 billion divestment target.
Shell Gas to Focus on Larger Projects as It Cuts Spending
Extract from an article by Eric Yep published 25 March 2014 by The Wall Street Journal
SEOUL— Royal Dutch Shell PLC’s global gas division will focus on large ventures where it has more control while it is likely to continue trimming some holdings and unprofitable investments as part of a program of cost-cutting and asset sales, a senior gas executive with the company said. “We typically like projects that we have a bigger position in that we can influence more,” Maarten Wetselaar, executive vice president, Integrated Gas, said in an interview… The London-listed oil major issued its first profit warning in a decade in January…
Shell undergoing massive sell off to fix its balance sheet
Extracts from an article poublished Monday 24 March 2014 by MarketWatch under the headline: Ghana’s Jubilee Points to Best Offshore Acreage in the World
LONDON / ACCESSWIRE / March 24, 2014 / The oil industry hasn’t started off 2014 with a bang. The oil majors – ExxonMobil, Royal Dutch Shell, Chevron, BP – all posted disappointing fourth quarter numbers. Shell in particular is undergoing a massive sell off to fix its balance sheet. Why are these companies struggling, and why all the gloom in the oil sector? Higher costs are the major reason. The oil majors are not looking all that great in terms of an investment opportunity.
Shell exit from 600,000-acre stake in southern Kansas
Extracts from an article by Dan Voorhis published on 21 March 2014 by The Wichita Eagle under the headline: SandRidge to let its oil leases expire on much of its acreage in Kansas
Land lease prices jumped in 2010 and 2011 from the $15 to $75 per acre range to $250 to $1,500 per acre, depending on location, when SandRidge, Shell Oil and other large out-of-state oil exploration companies rushed to accumulate large leaseholds. But the geology of the Mississippian layer proved more complex and less consistently profitable than expected. The mixed results led most of them to leave. SandRidge investors deposed company founder Tom Ward in 2013 because of low profits and low stock prices. Ward has since returned to Kansas with a new company, Tapstone Energy, which purchased Shell’s approximately 600,000-acre stake in southern Kansas.
Shell in slashing mode
Ben van Beurden, Chief Executive Officer. Royal Dutch Shell Plc
Extracts from an article by EDUARD GISMATULLIN published by Bloomberg News on 14 March 2014 under the headline: Shell in slashing mode: Cuts Americas spending by 20% after losses in shales
THE HAGUE (Bloomberg) — Royal Dutch Shell plans to lower spending in the Americas by a fifth as Europe’s largest oil producer focuses on more profitable operations. It’s “not acceptable” that Shell, now deploying about 36% or $80 billion of its capital in North America, has been losing money, Chief Executive Officer Ben van Beurden said. Van Beurden has pledged to shrink spending costs this year and speed up asset sales including refineries after The Hague-based company issued its first profit warning in a decade.
Shell Oil fading
Extracts from an article by Robert MagyarShell Oil fading in the Pennsylvania Marcellus”
A new analysis of the second half 2013 Pennsylvania Marcellus shale oil and gas production shows the vast majority of Royal Dutch Shell’s 630 wells are under performing compared to its peers. In northeast Tioga County, Shell’s wells are producing at less than half the rate of its area competitors. Its more bad news for Shell as its new CEO Ben Van Beurden announced on Thursday the company would cut its spending in onshore U.S. operations by 20% and begin selling off assets. Shell purchased its Marcellus shale holdings by buying Terry Pegula’s East Resources Inc. back in 2010 for $4.7 billion. By early 2013, Shell took a $2.1 billion write down on its U.S. shale operations.
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