Shell Share Discussion Threads

[montyhedge] 07/12/2015 18:17

Capitulation coming.

[wllmherk] 07/12/2015 17:28

yep, the lower this falls the more likely a dividend cut becomes. Im down 23% on my original investment !


wllm

[montyhedge] 07/12/2015 17:19

Arabs can afford to see $20 a barrel, put most of the U.S. Shale producers out of business.I see Shell 1435p.Dividend cut in half.

[smith99] 07/12/2015 17:16

its all very well selling assets to pay for the dividend but you have to wonder who's going to be left to buy them and at what price? I am a long term shell holder (5+ years into my future is when I see these coming right) but this is going to get very painful along the way but an absolutely once in a lifetime buying opportunity for those whose balls are big enough.

[montyhedge] 07/12/2015 17:14

No chance holding the dividend.

[imperial3] 07/12/2015 17:09

Is Shell strong enough to hold/maintain the dividend?

[dunns_river_falls] 07/12/2015 16:52

Supply is being killed off day by day at these oil prices. The weak are folding. The strong will ride the wave back up above $100 - and they dont come stronger than Shell.

[my retirement fund] 07/12/2015 16:43

down 4.4% in a day !

[careful] 07/12/2015 16:31

deal looks cheaper by the day.
now 383=684 = 1070.

[imperial3] 07/12/2015 15:33

$10 a barrel beckoning?

[84stewart] 06/12/2015 17:58

The only way shell will not pay $70bln is by buying back their own shares and reissuing them to BG shareholders IF they agree to merger, but may have to give .45 shares per BG share + 385p Imo to make the deal worthwhile (minimum) taking deal nearer $70bln or nearer £13.50

[ariane] 06/12/2015 11:47

Shell Has Underperformed, But It Could Be The Only Oil Major That Emerges Bigger From The Downturn
Dec. 6, 2015 2:35 AM ET | 3 comments | About: Royal Dutch Shell plc (RDS.A), RDS.B, Includes: BRGYY
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary

The oil major Royal Dutch Shell is closing in on its biggest-ever merger with the UK based oil and gas producer BG Group.

Shell has been the worst performing stock in its peer group and now offers an above average yield of 7.8%.

But Shell is generating enough cash from operations and asset sales to cover its spending.

More importantly, Shell could be the only oil major that emerges even bigger from the downturn.

The oil major Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) is closing in on its biggest ever merger with the UK based oil and gas producer BG Group (OTCQX:BRGYY). On Wednesday, the Anglo-Dutch oil producer revealed that it has received a green signal from Australia's Foreign Investment Review Board following an approval from the country's anti-trust regulator received last month. The BG Group is one of the major players in Australia's rising LNG sector where the company has invested more than $20 billion on developing the Queensland Curtis LNG plant.

The latest approval has come with a condition that Shell commits to engage with the Australian Taxation Office in a transparent manner in order to prevent any future disputes. The proposed merger has already received the nod from relevant authorities in Brazil and Europe, meaning most of the regulatory hurdles have been overcome. The next step is getting an approval from China's Ministry of Commerce which will also likely come in the near future since Shell has said that the regulatory process in the country has been moving forward smoothly and it expects to close the deal by early 2016.

Further positive news could provide respite to Shell whose American Depositary Receipts have declined 28% this year. In fact, Shell has been the worst performing stock in its peer group --which includes Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), BP (NYSE:BP) and Total (NYSE:TOT) - all of whom have also outperformed most of the other exploration and production stocks as represented by the SPDR S&P Oil & Gas E&P ETF (NYSEARCA:XOP). Thanks to the drop, Shell currently offers an above-average yield of 7.8%.

In its recent third quarter results, Shell reported its biggest loss in more than a decade, due in large part to one-time charges of $7.9 billion related to the abandoned Canadian oil sands and Alaska exploration projects as well as impairment charges. Excluding these one-off items, the company's profits plummeted 70% from last year to $1.77 billion, missing the consensus estimate by a big margin of $1.15 billion.

But I believe that this weakness could be a buying opportunity. That's because firstly, Shell is one of the rare oil majors that is still generating enough cash from operations and asset sales to cover all of its capital spending. In the first three quarters of this year, the company reported a positive cash flow balance of $121 million. This comes at a time when nearly every other large-cap oil and gas producer has reported a deficit. That says a lot about Shell's position in the downturn and the safety of its dividends.

So far, Shell is the only oil major that has used the downturn as an opportunity to make a large acquisition, which could allow it to significantly grow the size and scale of its operations. BG Group did come with a hefty price tag of $70 billion. That price was agreed at a time (in April) when oil was expected to recover to more than $70 a barrel by 2016. Since then, the crude pricing environment has exacerbated and the industry has embraced a "lower-for-longer" scenario. Some analysts, including those from Citi, expect WTI to average just $55 a barrel by the fourth quarter of 2016. Consequently, some investors are concerned that Shell may have overpaid for the British company. However, it is unlikely that Shell is actually going to pay $70 billion since nearly two-third of that value was based on the price of Shell B shares which have declined by more than 20% since the beginning of April.

It is worth mentioning here that Shell has planned to undergo a major divestiture drive which will fuel its buyback program. This should have a positive impact on the company's shares, particularly due to the dilution which will come with BG Group acquisition. The company will significantly reduce equity by spending $25 billion between 2017 and 2020 to buy back shares.

The merger has clear advantages for Shell. Firstly, the merger would boost the future prospects of Shell's Arrow gas venture in Queensland. The company acquired Arrow Energy, which has significant coal seam gas reserves, for $3.5 billion by partnering with PetroChina (NYSE:PTR) in 2010. But Shell cancelled its plans to construct a new LNG plant earlier this year, which meant that it had to rely on someone else's LNG terminal if it wanted to export the gas to foreign buyers. But following the merger, Shell can supply the gas from its reserves in Queensland to BG Group's Queensland plant.

Shell will also add BG Group's lucrative assets in Brazil to its portfolio, particularly the company's offshore wells in the Santos Basin which have one of the best flow rates in the industry. Currently, Shell's operations in the country are significantly smaller than BG Group. In addition to this, the merged company will also create value for the shareholders through cost cutting measures and synergies of $3.5 billion by 2018.
Conclusion

Shell is moving closer towards its merger with BG Group, which could create significant advantages for the company in the long run. This will allow Shell to exploit the Arrow gas assets sooner than it would have done on its own and significantly grow deepwater reserves while creating value for shareholders through cost saving measures and synergy. Currently, the company is handling the challenging market conditions quite well, as evident in the positive cash flows. And with other oil majors largely staying on the sidelines of M&A activity, Shell could be the only oil major that emerges as a significantly bigger player from the downturn.

[chairman20] 05/12/2015 15:17

Sogesit

a lifetime ago I to was involved
and the one thing I remember is
that when it comes to oil and gas
fields the daily spot price is a
very very crude approximation because
funding and ownership (farm-ins) are
all based on long term commercial
agreements - sometimes at a 20-year
price not a daily price.

tanker loads of stuff often trade
very short term (90-day contracts)
but that is equivalent to a trading
book quite separate from investment
economics.

Just another 'unknown' in the pricing mix for
the integrated Oil Majors.

[sogoesit] 05/12/2015 06:31

"Maybe 1995 levels post-merger" seems a curious period to choose.
In fact Shell T&T's share price was at a relative peak between 1995 and 1997 so am curious what the reason for such a number/level would be? On a charting basis I would have thought that the 1990 to 1995 levels of 500p or 800p respectively would be better support. Near term support looks like 1200p to 1300p.
The issue with Shell is always that of the sustainability of the dividend. If the dividend is sustained the yield just increases as the share price declines. In profitability terms Shell is complicated by its integrated structure so directly relating it to the oil price alone is difficult and maybe invalid. With the acquisition of BG Shell will be even deeper into the world of gas and, other than their commercial negotiators, it is unlikely anyone will know with enough certainty what prices gas will be sold at based on their contractual price indexing to oil, coal, rpi,ppi etc. etc. Not to forget that gas, unlike oil, is contracted and has to be taken... or paid for.
However, having spent over half my career at sub-$10 oil, this is a scenario which can well occur and, more pertinently, endure.
Given that, I am accumulating at this point in the cycle (my time horizon being 10-15 years), and will probably do so via a purchase of BG shares over the coming weeks.
Good luck.

[muffinhead] 04/12/2015 19:39

6 quarters on the trot

range target plus a bit of fractal ying yang to downside...maybe 1995 levels post merger



free stock charts from uk.advfn.com

[muffinhead] 04/12/2015 19:04

Internal combustion engine era is coming to an end over next 20 years imo



"its lithium-ion batteries can receive an 80 per cent boost in just 15 minutes"

[imperial3] 04/12/2015 18:59

OPEC has done nothing to halt the downward spiral of oil prices,by keeping production so high.I just wonder whether they will all still sing the same tune, when the price falls to $25 or for that matter $10.In that event,they have only themselves to blame, and accordingly cannot have any grounds for complaint.

[funtimejonny] 04/12/2015 18:21

More grief coming down the track re opening up Corrib field I see.

[deanforester] 04/12/2015 17:43

Q3 dividend to be 31.07p, €0.4299.

[minerve] 04/12/2015 15:21

As the oil price tanks......

[grupo] 04/12/2015 15:18

UBS reiterates buy on Royal Dutch Shell
BG Group Quote more

Price: 1,021.00

Chg: -13.00

Chg %: -1.26%

Date: 14:59
FTSE 100 Quote

Price: 6,236.49 Chg: -38.51 Chg %: -0.61% Date: 15:00

(ShareCast News) - Following regulatory clearance from Australia for Royal Dutch Shell's purchase of BG Group, analysts at UBS reiterated their 'buy' recommendation on shares of the the oil major.
They also told clients they should expect the spread between the share price of BG and Shell's buy-out offer to shrink further, given the improved visibility on a deal close.

Now, the last remaining hurdle was approval from China's MOFCOM.

Over the last six trading days the difference between the BG share price and the implied Shell offer (dividend adjusted, assuming close after 19 February) had decreased by about 410 basis points to stand at 7.7%

Analyst Jon Rigby referenced a report in the Sunday Telegraph according to which MOFCOM was expected to clear the deal before Christmas and a February close looked feasible.

On the back of the above, the Swiss broker reaffirmed its 2050p target price, which resulted from setting a 5.8 times 2017 EV/DACF multiple (six times in pro-forma terms). While that was higher than its sector peers which were on 5.5 times, its forecasts for a rapid increase in cash-flow thereafter meant such an increase was warranted, they believed.

[whiskeyinthejar] 03/12/2015 23:36

Saudi like to surprise the market so you never know, do you!

GLA.

[dukedosh] 03/12/2015 21:57

WhiskeyInTheJar,

It is said the coalition are bombing Daesh oil and there's rumours suggesting OPEC might just cut production and support the oil price.

[whiskeyinthejar] 03/12/2015 18:52

Brent has bounced by over 4% for no good reason I can see.