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RDSA Shell Plc

1,895.20
0.00 (0.00%)
Last Updated: 00:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Shell Plc LSE:RDSA London Ordinary Share GB00B03MLX29 'A' ORD EUR0.07
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 1,895.20 1,900.20 1,900.80 - 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Shell Share Discussion Threads

Showing 251 to 263 of 3150 messages
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DateSubjectAuthorDiscuss
20/2/2016
13:44
Prospectus Supplement dated 15 February 2016



Royal Dutch Shell plc's 4th Quarter and Full Year 2015 Unaudited Results dated 4 February 2016

grupo guitarlumber
18/2/2016
20:11
(ShareCast News) - Fitch Ratings has downgraded Royal Dutch Shell's long-term Issuer Default Rating (LT IDR) to 'AA-' from 'AA' with a 'Negative' outlook.
In a note to clients following the close of trading on Thursday, the rating agency said, "Shell's one-notch downgrade follows our re-assessment of the group's financial profile following the completion of its BG acquisition on 15 February 2016."

Using Fitch's latest Brent price assumptions of $45 per barrel in 2016, $55 in 2017 and $60 in 2017, the agency forecasts that Shell and BG's combined funds from operations (FFO) net adjusted leverage will peak at end-2016 at under 2.5x before moderating to 2.1x at end-2017, and gradually to 1.9x-2x in 2018-2019, ie, to the upper leverage range of its 'AA-' rating guidance.

Fitch added that its 'Negative' outlook on Shell reflects risks stemming from the company materially missing the targeted level of asset disposals in a competitive market environment, expectations of fairly stable dividend payouts, increase in leverage due to recurring negative free cash flow (FCF), lower oil prices and weaker cash generation.

Shell's downgrade also reflects the group's deteriorating financial profile following the completion of the BG acquisition, Fitch added.

"In this oil price environment, the expected improvement to Shell's upstream profile post-BG acquisition does not, in our view, fully offset the forecast deterioration of its credit metrics, as the group's higher post-acquisition leverage exceeds our negative rating action trigger of above 1.5x on a sustained basis," the agency concluded.

waldron
18/2/2016
01:00
Tax Withheld on Foreign Dividends?
April 11, 2013 3:43 PM Subscribe
Last year, I bought shares in Royal Dutch Shell (RDS.A), because I like the $3.44/share dividend they pay, making it a good place to park spare investing cash. (That is, I don’t really care about the share price, if only up to a point, as long as my investment is yielding 5.32% annually.) Foreign tax is withheld on the dividend payments, which I get back by claiming the total as a foreign tax credit on my federal tax return. What I don’t understand is, when foreign tax is withheld, who is withholding it? Am I correct in assuming that it is an IRS-mandated withholding, and that by claiming the credit the withholding is canceled out? Any comments addressing my “spare investing cash” strategy also invited.
posted by Short Attention Sp to Work & Money (4 answers total) 1 user marked this as a favorite

The foreign tax withheld is Dutch tax. It's withheld at some custodian or broker above you and remitted to the Dutch government. You get a credit for US taxes you would otherwise pay on the same money. The IRS has nothing to do with the imposition of the withholding, though Treasury negotiated the US-Dutch tax treaty, which supplants the normal dividend withholding rate.
posted by Admiral Haddock at 4:53 PM on April 11, 2013 [1 favorite]


The foreign tax withheld here isn't going to the IRS, it is going to the foreign country concerned (for RDS.A, I believe it is the Netherlands, but your 1099-DIV should say for sure). That tax is paid to the foreign government because you likely owe them some amount of tax on the dividends, and they don't think you're particularly likely to pay up voluntarily as someone living on the other side of the planet with no ties to their country. Since you're not going to be filing a Dutch tax return anytime soon, the withholding makes sure that the Netherlands get their tax revenue without any action on your part.

So Shell (or an agent who handles such things) takes out the withholding and pays it to the Dutch government on your behalf before you get your dividend. Instead of having to go to the Netherlands to get any money back, you can take the US foreign tax credit and have your US tax bill reduced by, ideally, the same amount you paid in tax to the Netherlands. Since this is US tax law we're talking about, some restrictions apply, and you might not be able to get the full amount back, especially if you have an especially high or low income or the stock is held in a tax-advantaged retirement account.

You should note that there are some additional options with RDS's two share classes, about which Seeking Alpha nicely discusses the tax differences. The distinction is particularly useful if you become subject to the AMT, which can reduce your foreign tax credit.
posted by zachlipton at 5:14 PM on April 11, 2013 [1 favorite]


Why would you park spare cash in a single stock?

If by "park spare investing cash" you mean "somewhere to keep cash handy until I use it for something in a year or so," this strategy is incredibly risky, and no competent financial advisor would recommend that you do it. In this case, you park spare cash in a MMA or CD or some other short-term equivalent and live with the fact that you will not make much in the way of interest (on the other hand, you won't have much in the way of transaction fees, either).

If by "park spare investing cash" you mean "invest for the long term," then your strategy is also risky. Why bet on one company's shares instead of diversifying?

You can probably see that my bias tilts toward managing volatility and risk and away from trying to win big by betting my investment on one particular company's shares. If you already have lots of diverse investments, I'd just plow this spare investing cash into more of the same rather than being overweighted in one particular stock. If you don't have lots of diverse investments, then you're basically gambling with your investment money.
posted by MoonOrb at 6:21 PM on April 11, 2013


As a general rule, any investment which yields a higher return than you would get investing in treasury bonds or in a savings account is worthwhile - in the US yields on savings are at historic lows, and because of inflation you actually lose money if you let it sit in a savings account or T-bills. However, if you are not putting your shares in an IRA, tax has to be taken into consideration and subtracted from your returns to give you an accurate picture of your net gains. Here's another Seeking Alpha article about tax implications of ADRs.

Something else to consider for non-IRA investments is that your tax rate on gains is much lower if you hold your shares for at least a year. Dividends are taxed at a different rate, but that's only for qualified dividends (many ADRs do not qualify, and sometimes their dividends are considered ordinary income by the IRS). If you invest in a solid company with a proven dividend track record, and if you reinvest your dividends in more shares rather than taking it in cash, your yield on your dividends is compounded (usually quarterly, or whenever the dividend is paid). Compound interest is a very powerful investment tool over time. Also, you're correct- the share price itself is mostly irrelevant. What matters is gains, yield, tax rates, etc.

The main problem I see with your current approach is that you didn't understand the tax implications of your investment before you put your money at risk. All investment carries risk. Understanding and mitigating or managing risk is the key to investing. Also, you really do want to take into consideration how much hassle certain types of investments will be, not only for initial research, but also the work you will have to do later when filling out your tax forms (or how much you will have to pay someone else to do it). Some investments will give you slightly better returns than others but sometimes have outright Byzantine layers of taxes involved from numerous countries, states, municipalities, etc (many funds have these issues). The hassle may or may not be worth it to you, even for larger potential gains, but in any event it's always worth taking the time to research thoroughly any investment before putting your money on the table, and to understand your objectives and strategies as an investor and how any particular company would fit into that strategy and help meet your objectives, and most importantly, what's your plan if your investment loses value - if you don't know, don't put your money at risk!

It's not as hard as it sounds (as long as you're not being unrealistic about your goals), but if you don't do the work you will get slapped around by the market sooner or later. Depending on how much money you have at risk, that could be a seriously painful lesson, so instead learn to mitigate your risk as much as possible by doing your homework and following an investment strategy and plan. Honestly, if you do the basic research by looking at the balance sheet and financial and earnings history of the company, you'll be way ahead of the vast majority of people who manage their own investments, and even those who pay others to do it for them.
posted by krinklyfig at 6:28 PM on April 11, 2013 [1 favorite]

maywillow
18/2/2016
00:34
Can you get the with holding tax back if held in an issue???
eithin
17/2/2016
22:19
BG acts as a painkiller for Royal Dutch Shell amid lower oil prices
Published by Sam Hason on February 17, 2016 at 1:26 pm EST

RDS.A

img BG acts as a painkiller for Royal Dutch Shell amid lower oil prices
Merrill Lynch expects Shell’s earnings to rise by 576% in 2016 as a result of integration

Royal Dutch Shell's plc (ADR) (NYSE:RDS.A) merger with BG Group has been at the center of debate amid lower for longer crude oil prices. The Anglo-Dutch company had faced criticism from several shareholders and analysts over the viability of the deal under distressed commodity prices.

Shell proposed to acquire BG in April last year. At the time, oil prices were over $55 per barrel, and it expected the price to recover to an average of $65 per barrel. Since oil prices have fallen in every quarter since the deal was announced, analysts and shareholders were left worried over the financial viability of the merger under distressed oil prices. The WTI benchmark for oil fell to as low as $26.55 last month.

However, Shell managed to convince a majority of its shareholders in favor of the BG deal, which was formally completed on February 15th. Making the case for the merger, Shell stated that the deal would provide the combined company with long-term strategic benefits, giving it the advantage of BG’s assets. Shell also stated that the combined group is expected to generate $30-40 billion of cash annually.

The Dutch company plans to cut 10,000 jobs from the combined company and sell assets worth $30 billion over the period of 3 years.

Bank of America Merrill Lynch (BoAML) remains bullish about Shell since it believes the merger would help the Dutch company outperform its peers in Europe in 2016. The research firm, in its sell side report published on February 16, retained its Buy rating for Shell, with a 12 month target price of $61.90 per share.

BoAML expects a 40% upside potential in Shell’s stock price, stating that the current share price of the company reflects mistrust towards the successful integration of both the companies. The investment firm believes that the Anglo-Dutch company entered the “path of pain” sooner than its peers, which would provide the oil major to withstand the lower for longer oil price environment better than competitors.

The sell-side report estimates that BG would allow the oil major to aggressively cut its capital spending, without worrying about lower production on an immediate basis, as the integration would contribute an additional 20% to Shell’s production and resource base.

Furthermore, BoAML expects that the merger would increase Shell's free cash flow (FCF) by more than 30%, and strengthen the company’s ability to maintain dividend payments to its shareholders during the oil crisis. The research report estimates that BG's FCF covers an additional 20% of the oil major’s dividend until 2017.

The investment bank believes Shell’s dividend yield of 9%, which is higher than the industry average of 6.5%, is mispriced in its shares, as investors continue to value BG’s acquisition at the oil price of $60 per barrel, and ignore the synergies that the deal would provide.

The sell-side report estimates Shell's earnings per share (EPS) to rise by more than 575% year-over-year (YoY) in FY16, since it views BG's integration into Shell as a “painkiller221;.

BoAML argues that the combined group remains one of the few majors to deal with the “big oil trilemma” which includes maintaining dividends, sustaining production base, and maintaining credit ratings, under the lower oil price conditions.

Shell has performed quite well so far in 2016, having lose just 39 cents year-to-date (YTD) as of February 16. While the WTI index slipped more than 21%, to $29.04 per barrel.

maywillow
15/2/2016
22:28
Shell’s takeover of BG promises to be more than the sum of its parts

Ben van Beurden

February 16, 2016 Updated: February 15, 2016 08:32 PM

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Topics:

Gas Oil

One-page article

The writer is the chief executive of Royal Dutch Shell.

Monday saw the birth of a new player in the global energy industry. In the midst of some of the toughest market conditions in decades, the joining together of Shell and BG creates a company of extraordinary strengths – a combination greater than the sum of our parts.

I feel privileged to be part of this historic, transformative moment. It has been an intense 10 months since we first announced the combination with BG and yesterday was a very special milestone for us – officially the first day of operations for the combined company.

It has also been a period of great volatility. Although the oil price has fallen since our announcement, I remain convinced of the strategic and financial merits of the deal.

Over time, I expect the fundamentals of energy supply and demand to reassert themselves and the strategic and economic benefits of the deal to fully deliver for shareholders. The deal reinvigorates Shell and will be a springboard for further transformation. We now plan to shape a simpler, leaner, more agile and competitive company focusing on our priorities for growth in liquefied natural gas (LNG) and deep water.

The acquisition significantly boosts our oil and gas reserves and production capacity, and is expected to provide a strong injection to our operating cash flow.

It underpins our role as one of the world’s largest independent producers of LNG. But this deal is not about size. It is about quality. The combined value of our existing and potential energy projects creates a company more able to brave the cycles in our industry, and strengthens our ability to pay the dividend at any oil price that might reason­ably be expected.

In the UK, Shell inherits sev­eral current and planned projects in the North Sea. These are a good fit with our existing operations in what is still an impor­tant region for energy production, despite the challenges it faces.

Shell has acquired major oil and gas projects in Brazil and Australia, and interests in other key countries.

The deepwater projects in Brazil we now own were one of the major drivers of this deal. Brazil is a country we know well, through the exploration and production aspects of our business, our retail outlets and our low-carbon biofuel joint venture. It is quite simply a country of the highest strategic importance to us, a land with plenty of potential for growth.

Our global deepwater experience and technical expertise will help us build on our existing relationship with the national oil company Petrobras. The Libra joint venture already plans to develop a major oilfield 170 kilometres off the coast of Brazil. Our newly acquired deepwater operations off Brazil will now add to current production from our Parque das Conchas oil and gas project.

We see potential for immediate benefits from our and BG’s complementary LNG operations in Australia and Trinidad and Tobago, as well as in Asia – a crucial and growing market.

Other clear benefits include BG’s strong position in trading and shipping, which will bolster Shell’s capabilities, volumes and relationships in these core areas for the future development of the global gas market.

We are determined to use this coming together to achieve efficiencies – at $33 billion our planned capital investment in 2016 is considerably less than the combined annual spending of both companies in recent years.

Over the next three years we plan to sell assets, as well as make significant savings in overlapping costs and reduced spending on exploration. We have already announced plans to reduce staff and contractors, which in these harsh economic times is a difficult but necessary step.

This timely rejuvenation of Shell sharpens our ability to adapt and thrive in an energy landscape that will continue to change. It’s clear that business as usual isn’t good enough if the world is to tackle climate change, while making vital energy available to a growing population in need of a decent standard of living.

A global energy transition is under way. I want Shell to be part of this transition by producing more natural gas to replace coal in power generation; continuing to invest in the develop­ment of energy sources for the future, such as low-carbon biofuels and hydrogen as a fuel for transport; and by helping to develop carbon capture and storage. We will continue to advocate government-led carbon-pricing systems.

This is one of the largest acquisitions in UK corporate history and the biggest in the energy industry for many years. However, we must not forget that people make companies and we will make sure that our combined teams blend together smoothly. There is much to learn from one another. Those who have worked hard to build BG’s im­pres­sive portfolio will find they are among like-minded people. Bright, inventive, resilient people who care about the industry they work in, and about the health of our planet.

To create a more structured and transparent process for in­te­gration of the companies, we have set up a transition organisation. Each existing part of Shell’s business will be swift to understand the activities and support needed for our new assets and businesses.

We must now set about delivering the value we have promised. Ahead lie several months of detailed collaboration between colleagues from both Shell and BG to achieve full integration towards the end of this year.

In my 32 years with Shell I have sometimes heard people say: “This company is like an ocean-going tanker. It takes an age to turn.” With the completion of this deal, we have truly changed course – and are now going full speed ahead.

business@thenational.ae

maywillow
15/2/2016
16:55
The UAE is offering India free oil in order to store crude there

15 February 2016 4:02pm

by Jessica Morris
UAE-OIL-GULF PETROCHEM

The world is running out of space to store oil (Source: Getty)

With millions of barrels of oil sitting in tanks and oil fields across the world, the UAE is offering India free oil in exchange for storing the commodity there.

Local media reports suggest that the United Arab Emirate's Abu Dhabi National Oil Company (Adnoc) has agreed to store crude in Indian's maiden strategic storage, giving away two-thirds of it to India for free.

Adnoc wants to use India’s new underground storage facility which can hold around 5.33m tons of the black stuff. It’s being built as a safeguard against global price shocks, as well as price disruptions.

While this is good news for India, which is heavily reliant on imports to meet crude demand, what’s in it for the UAE?

Some analysts are concerned that the world’s onshore oil storage capacity could run out. There’s no precise figure on oil storage capacity, with very little data outside of the OECD.

Read more: Oil company forecasts aren't in line with reality

But the International Energy Agency (IEA) has said one billion barrels of the black stuff were added to storage last month.

And data released last week showed stockpiles at the US’ main delivery point, Cushing in Oklahoma, has risen to an all-time high just shy of 65m barrels.

On the other hand, other industry players think that diminishing storage space is a good thing, because it will help the market to correct itself.

"We are very bearish for the first half of the year," Dudley said at the IP conference in London last week, Bloomberg reported.

"In the second half, every tank and swimming pool in the world is going to fill and fundamentals are going to kick in. The market will start balancing in the second half of this year."

maywillow
11/2/2016
12:49
Next div ex-date Feb 18 2016
Next div pay-date Mar 29 2016

waldron
10/2/2016
06:14
The US enters a brave new world as it begins LNG exports

By Chris Pedersen | February 10, 2016 12:01 AM Comments (0)

Next month, the US is set to export its first cargo of LNG from the continental US. Cheniere Energy, the company that won the highly-contentious race to be the first exporter out of the gate, will have some advantages over its US peers, but the global LNG landscape has changed significantly since the company first proposed to build its LNG export terminal over a half-decade ago.

Before diving into the current state of the world LNG market, let’s take a step back and see how we got to where we are today.

The beginning

In 2001, Cheniere Energy made an announcement to build four LNG import terminals in Louisiana, at a cost of $1.2 billion. As Charif Souki, Cheniere’s CEO at the time, hit the road to raise money, he told investors a simple message: The US is addicted to natural gas and we are running out of it. Therefore, we must import natural gas via LNG from abroad. After seven years, Souki and Cheniere’s vision became a reality, with the inauguration the Sabine Pass LNG import facility in April 2008.

But between 2001 and 2008, the forecast for US natural gas went from gas shortages to gas gluts. Showing off a sparkling new, state of the art LNG import facility, Cheniere was literally trying to sell natural gas into a sufficiently supplied market. It was like trying to sell ice in the North Pole or chocolate to someone in Hershey, Pennsylvania.

Cheniere then set out to do the complete opposite of what the planned to do a decade ago: export LNG. In September 2010, Cheniere was the first company to apply with the US Department of Energy for a permit to export LNG.

The art of a deal

By late 2011, Souki managed to work out a deal for Cheniere to sell $8 billion of LNG over 20 years to BG Group, which is now owned by Shell. In a nutshell, Souki’s pitch was this: US natural gas prices are forecast to stay low because of the abundance of newly-accessible shale gas resources, while natural gas and LNG prices are expected to remain high in Asia.

Why was Cheniere so confident that LNG prices were going to stay high in Asia? At the time, nearly all LNG prices in Asia were linked to oil.

This value proposition was successful, as Cheniere has been able to sell 80% of their LNG export capacity at Sabine Pass under take-or-pay contracts.

The sober start to 2016

Fast-forward to 2016. Cheniere is expected to export its first cargo of LNG out of Sabine Pass this March. As Cheniere, along with other hopeful LNG exporters, know all too well, market dynamics never stay constant and volatility is the name of the game. Commodities are cyclical. When Cheniere and other companies decided to build multi-billion dollar LNG export terminals, there was a large price difference between gas prices in the US and Asia.

pedersen-jkm-lngFor example, the average price for a spot cargo of gas in Asia in 2011, using the Japan-Korea Marker, JKM, was $14.02/MMBtu. A key reason prices spiked was the Fukushima nuclear disaster, which occurred in March 2011, leading Japan to shut 47.5 GW of nuclear generation capacity.

As new LNG facilities came online, prices have faced downward pressure. In 2015, the average JKM price was $7.45/MMBtu, and as of Feb. 3, the average price this year has been $5.73/MMBtu.

Awash in LNG

So how did we get to where we are today? Put simply, demand has recently failed to keep up with supply. Platts unit Eclipse Energy Group data shows global gas demand growth was insignificant in 2015, rising by a mere 700 MMcf/d, while at the same time roughly 2.2 Bcf/d of new export capacity was added. Over the next five years, total global export capacity is expected to grow by an exceptional 133.5 mtpa (17.8 Bcf/d), a 44% increase.

The US as a global swing supplier

Eclipse data shows that by 2020 the US will have become home to 15% of global liquefaction capacity and could become the world’s third largest exporter (behind Australia and Qatar). And due to the inherent flexibility of US LNG tolling agreements, American exporters have a good chance of becoming a swing supplier. Unlike other LNG contracts, US LNG tolling agreements do not have fixed destination clauses, allowing US-sourced LNG cargoes to show greater optionality in spot markets.
pedersen-gas-prices-forecast

The balance between global LNG demand growth and global LNG supply will be the two key variables in determining how quickly and to what extent American LNG plays a role in the global market of the future. Another key factor will be the price of US natural gas. Platts Analytics forecasts Henry Hub spot prices averaging $2.45/MMBtu in 2016 and increasing to $4.19/MMBtu in 2020.

Even though it appears to be a buyer’s market for now, the US is quickly becoming ready for when the tide turns. At this point, the world will find out just how capable the US can be in the LNG market. For now though, at least they can say something that they weren’t able to say a year ago: We are ready to play.

sarkasm
05/2/2016
16:10
Pay Dividends Or Keep Ratings
05/02/2016 8:03am
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Friday 5 February 2016
Click Here for more Shell A Charts.

(FROM THE WALL STREET JOURNAL 2/5/16)
By Sarah Kent and Bradley Olson

The world's biggest energy companies have a tough decision to make amid languishing oil prices: Do they keep their coveted investment-grade credit ratings or maintain century-old practices of paying shareholders annual dividends worth billions in cash?

Exxon Mobil Corp. and its peers are grappling with the collision course between the two, which appears unavoidable as crude continues to hover around $30 a barrel. Even with announced spending cuts that exceed $92 billion, producers are losing money on almost every barrel they take out of the ground. Paying dividends makes their cash shortfall even worse.

Four of the biggest Western oil companies -- Exxon, Royal Dutch Shell PLC, Chevron Corp. and BP PLC -- are poised to pay more than $35 billion in dividends to investors this year, an amount equal to about 40% of their combined cash flows, says Oppenheimer & Co. To do so, they face increased pressure to borrow, a strategy that has alarmed ratings firms.

"The question is, how bad are things going to get in 2016?" said Simon Redmond, director of oil and gas corporate ratings at Standard & Poor's Ratings Services. "For a company to focus on continued cash distribution is not credit positive."

Since the start of the year, all three of the world's top ratings firms have warned that oil company credit standings are at risk. S&P has already downgraded Shell and Chevron to mid-tier investment grade ratings, and raised the prospect that Exxon -- whose AAA rating outlasted even the U.S. Treasury's -- could face a one-step downgrade from its top-tier status.

So far, the chief executives at the biggest publicly traded energy companies have chosen dividends over higher debt ratings. But many smaller rivals, including ConocoPhillips, have slashed their hefty payouts. Conoco last year told investors its dividend was sacrosanct, but on Thursday cut its first quarter payment by 66% to 25 cents a share as it reported a $3.5 billion loss for its fourth quarter. Conoco shares fell nearly 9% to $35.32 in 4 p.m. New York trading.

Shell, which posted a $1.8 billion fourth-quarter profit, off 60% from a year earlier, reiterated plans to keep paying its dividend this year, helping boost its shares.

Nowhere is the tension more pronounced at the largest oil companies than at Exxon, which has increased its dividend for 33 straight years and made the payouts for more than a century. The company's bond rating has endured for decades through a number of commodities price crashes, the Valdez oil spill in Alaska's Prince William Sound and even megamergers with Mobil and XTO Energy.

Exxon is better managed than most countries, said Joe D'Angelo, an energy consultant at investment bank Carl Marks Advisory Group LLC. "For them to have lived through so many hurdles and now this one trips them, you have to stop and think about it," he said.

A ratings downgrade isn't the worst thing for most integrated oil companies because they are unlikely to lose access to capital markets or see their financing costs soar. This week Bob Dudley, BP's chief executive, said a ratings cut wouldn't have a significant impact on his company.

But ratings cuts would represent a loss of prestige, a sign that the ability of these companies to dominate world markets has diminished with this latest downturn.

"We get value from the AAA credit rating in our business, whether it be access to financial markets or access to resources," Jeff Woodbury, an Exxon vice president, said this week. "There is a benefit that we get from it, and we see it as being important."

Many oil and gas executives paying high dividends this year have pledged repeatedly not to cut the payouts in virtually any circumstance. One early outlier: Italy's Eni SpA cut the dividend in March and its shares fell 7% on the news. Since then Eni's stock has declined less than Chevron, BP and Shell.

Dividends put a strain on big oil companies because they are trying to spend only as much cash as they take in from their operations. Even if they manage to achieve that, they have to come up with more for dividends. "It's a terrible market to be trying to sell most assets out there," John Watson, Chevron's CEO, said last week. But he added that maintaining and even growing the dividend remains Chevron's "number one financial priority."

Such promises are essential to luring investors in the face of the worst oil crash in decades. For millions of retirees, who buy stock directly or through investment funds, dividends are a key source of income. Some could see a cut as a betrayal, analysts said.

"To a lot of generalist investors, there's a view that an investment in Exxon or Chevron is safe," said Norman MacDonald, a portfolio manager at fund manager Invesco Ltd. The companies are "painted into a corner," he said. Directors should reconsider their dividend policies, said Fadel Gheit, an analyst at Oppenheimer & Co. who has called for oil firms to reduce the payouts.



(END) Dow Jones Newswires

February 05, 2016 02:48 ET (07:48 GMT)

sarkasm
05/2/2016
13:59
Ex-dividend date RDS A and RDS B shares February 18, 2016
sarkasm
04/2/2016
09:06
(ShareCast News) - Despite Royal Dutch Shell posting an 80% drop in full-year profit, shares are up as investors knew last month what was coming and are eyeing up continued dividends.
The FTSE 100 oil giant company said full-year profit dropped to $3.8bn (£2.6bn) from $19.0bn in 2014.

In the fourth quarter, profit was $1.8bn, up from a loss in the third quarter of £6.1bn but down from the profit in the last quarter of 2014 of $4.2bn.

Earnings from its upstream business were affected by lower oil and gas prices, however that was partly offset from lower costs.

The company also confirmed it will pay a fourth quarter dividend of $0.47 per share, and said it is expecting to announce a first quarter dividend at the same rate.

Royal Dutch Shell chief executive officer Ben van Beurden said the completion of the BG Group merger will rejuvenate the group.

"We are making substantial changes in the company, reorganising our Upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices," he said.

"As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies."

CMC Markets' Michael Hewson said the results meet expectations as investors look for the dividend.

"This morning's results from Royal Dutch Shell didn't offer up too many surprises given that CEO Ben Van Buerden gave investors a "heads up" at the end of January," he said.

"As far as the dividend policy is concerned Shell is better placed to keep it at current levels in the short term, given its better dividend cover, while its debt levels have been falling relative to its peers since the end of 2013, which suggests that for now the 9% yield is probably safe."

Hargreaves Lansdown's Danny Cox noted the company is famous for its dividend track record.

"Half of Holland would keel over in apoplectic horror if Shell ever cut the payout," he said.

"The merger with BG, as the company points out, supports the dividend under "any expected oil price scenario".

"That's because BG's Brazilian and Australian projects have strongly rising production profiles and relatively low operating costs. "

Cox said Shell are promising that the dividend is safe unless the unexpected happens.

The company's A shares were up 61p (4.24%) to 1,499p at 0855 GMT, while its B shares were up the same amount to 1,498.5p.

la forge
04/2/2016
08:53
Shell's profits plunge 80pc amid oil price slump
Royal Dutch Shell confirms 10,000 jobs will be axed as it grapples with the collapse in oil prices


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A flag bearing the company logo of Royal Dutch Shell, an Anglo-Dutch oil and gas company, flies outside the head office in The Hague, Netherlands
Shell's profits plunged 80pc in 2015. Photo: AP
Tara Cunningham

By Tara Cunningham, Business Reporter

8:37AM GMT 04 Feb 2016

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Royal Dutch Shell has become the latest victim of the oil price rout after it confirmed 10,000 jobs would be axed amid its sharpest decline in income in 13 years.

Pummelled by low crude prices, income for the year slumped 87pc to $1.9bn.

The oil major said earnings on a current cost of supplies basis, its preferred way of measuring profits, tumbled 56pc in the final three months of 2015 to $1.8bn, compared to $4.2bn in the previous year.

The torrid quarter took its toll on the Anglo-Dutch group, dragging its full-year profit from $19bn in 2014 to $3.8bn - an 80pc fall.

Excluding exceptional items, profits for the year came in marginally below market expectations at $10.7bn.

Earnings in Shell's upstream business - which seeks out and produces oil - were hindered by “the significant decline in oil and gas prices”, the group said.

Ben van Beurden, chief executive, said: “We are making substantial changes in the company reorganising our upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices”.

The oil giant has been slashing costs in a bid to counter the dramatic plunge in oil prices. This year capital expenditure fell $8.4bn to $28.9bn.

A trading update earlier this month revealed thousands of jobs would be slashed. This morning, the FTSE 100 confirmed 10,000 employees and contractors would face the chop.

Michael Hewson, of CMC Markets, said the results “didn’t offer up too many surprises after Mr Van Beurden’s head’s up at the end of January”.

"The completion of the BG transaction marks the start of a new chapter in Shell."
Ben Van Beurden, Shell chief executive

A fourth-quarter dividend was also announced at $0.47 a share.

“As far as the dividend policy is concerned Shell is better placed to keep it at current levels in the short term,” Mr Hewson added.

“Ben Van Beurden won’t want to go down in history as the first CEO to cut the dividend since 1945.”

In the last three months of the year, Shell said it completed the sale of 185 service stations across the UK to independent dealers, who will all retain the Shell brand and sell its fuels.

Last week, shareholders voted through the £40bn takeover of BG Group by a strong majority, paving the way for the creation of Britain’s largest public company. The deal is expected to complete by February 15.

“The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns,” said Mr Van Beurden.

Capital investment for the combined Shell-BG group is expected to be $33bn this year, down some 45pc from their combined peak in 2013.

There is further flexibility to reduce capital investment, the group said.

Oil and gas producers have been pounded by the slumping price of oil, amid an unprecedented supply glut.

Mr Van Beurden said: “Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that.”

Earlier this week, BP unveiled its worst annual loss in at least 20 years. It posted a loss of $5.2bn, compared to the $8.1bn profit it recorded the previous year. The oil market collapse also forced it to slash 4,000 jobs.

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