Shell Share Discussion Threads

[sarkasm] 16/2/2017 16:57

'Flurry' of billion dollar deals signals start of 'third wave' of North Sea activity, says expert

Chrysaor's recent $3.8 billion acquisition of North Sea oil and gas assets from Shell will be the "catalyst" for a new wave of mergers and acquisitions in the UK Continental Shelf (UKCS), according to an expert at Pinsent Masons, the law firm behind Out-Law.com.15 Feb 2017

Energy and infrastructure finance Corporate Projects Equity capital markets M&A Oil and gas Energy UK Europe

Energy deals expert Rosalie Chadwick described the deal as the likely "tipping point" leading to a "third wave of the North Sea's evolution and a number of other significant transactions in the months and years ahead".

"More availability of funding, a stable oil price, better alignment of price expectations for both buyers and sellers, and a fresh approach to decommissioning responsibilities means that all the chess pieces are lined up with the North Sea poised for a period of productive M&A activity," she said.

"The identity of a lot of owners will change quite considerably, but it is no bad thing to see well-capitalised new blood enter the sector and embracing new technologies, which make smaller recoveries in the more mature fields economically viable," she said.

Over $6bn has been invested in North Sea assets in the last six months as a result of renewed interest in exploration and production activity, including the $1.24bn acquisition last week of Ithaca Energy by Israel-based Delek Group. Pinsent Masons provided legal advice to Ithaca on the deal, which Chadwick said "caps off a busy start to the year which has seen a renewed level of interest in North Sea assets as prices have stabilised and expectations adjusted".

The private equity markets had provided an increasing source of finance for deals over the past six to 12 months, not just in funding management terms but also in capital deployment, Chadwick said. Innovative deal structures including the likes of Blackstone and Bluewater Energy's investment of over $500 million into Siccar Point Energy, Suncor Energy's acquisition of a 30% stake in the Rosebank project and EnQuest's £85m purchase of a stake in BP's Magnus field also pointed to the recovery of North Sea investment, she said.

"This has been transformational after a four-year funding hiatus which left the North Sea perched on the edge of a chasm," she said.

Chadwick said that the surge in activity could be attributed to businesses both successfully adjusting to the 'new normal' oil price of $50 per barrel following the steep decline in commodity prices, and taking a "more realistic" view of assets due for decommissioning. Shell, for example, has agreed to cover around $1bn worth of Chrysaor's future decommissioning costs as part of their deal; while Chrysaor noted the reduction in North Sea operating costs to "competitive economic levels" as part of its announcement to the industry.

"This funding boom is a combination of businesses successfully adjusting to the new $50 oil norm and resetting their cost base which has resulted in a surge of confidence in investment in North Sea assets," Chadwick said.

"We're also experiencing a transformation in terms of the treatment of decommissioning as assets change hands. Majors are taking a more realistic view, with recognition that some liabilities will need to be retained and the net result of this shift in attitude is that more deals will get over the line," she said.

The average cost of extracting a barrel of oil or gas fell by 45% during 2015, according to the latest figures from industry body Oil and Gas UK.

[waldron] 13/2/2017 09:42

Why I believe Royal Dutch Shell plc’s dividend looks safe despite falling profits
Shell petrol station
Photo: Coolcaesar Licence: hxxp://creativecommons.org/licenses/by-sa/3.0/deed.en
Rupert Hargreaves | Monday, 13th February, 2017 | More on: RDSB

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inShare

For much of the past three years, investors have continually questioned the sustainability of the Royal Dutch Shell (LSE: RDSB) dividend payout as the price of oil has languished.

Indeed, as the price of oil has fallen to its lowest level in over a decade, Shell has been paying out more than it can realistically afford to investors, filling the gap between income and spending with debt. For example, during 2015 the company paid a total dividend of $9.4bn to investors even though free cash flow after capital expenditure was only $4bn. Last year, including capital spending and the dividend, the company spent $10bn more than cash generated from operations.

In both of these cases, borrowing filled the gap between spending and income. As a result, and including the acquisition of BG Group, Shell’s debt has ballooned to a staggering $92.5bn, a gearing ratio of 50%. Five years ago, its gearing was 22%.

But despite the cash crunch and rising level of debt, I believe the group’s dividend payout is here to stay.
The worst is over

It looks as if the worst is now over for the oil market. After the price of Brent crude collapsed to a low of $35/bbl at the beginning of 2016, the price of black gold has now rallied back above $55/bbl, and Shell’s income has also steadily improved.

During the first quarter of 2016, the group generated $661m in cash from operations, hardly enough to cover 10% of capital spending commitments for the period. However, during the last two quarters of 2016, cash generated from operations came in at just under $18bn. This total was more than enough to cover capital spending commitments, the dividend and to reduce debt from a high of $98bn at the end of the third quarter to that $92.5bn by the end of the year. Asset sales also helped bulk up cash flows.

Shell’s dividend payout costs the company around $2.5bn per quarter, which is usually easily covered by cash generated from operations. As the price of oil has languished, cash generation has failed to meet spending commitments, but Shell’s management has reacted quickly to improve dividend longevity.
Crunching numbers

Shell’s capital spending obligations have fallen by half since 2013. This year the group is planning to spend $25bn, down from around $29bn for 2016. During 2015 the average Brent crude price was $52.4/bbl on which Shell managed to generate $30bn. This year the price of Brent has averaged $55bbl so looks as if Shell will be able to generate $30bn or more in cash from operations. Cash generation should easily meet capital spending commitments and when combined with the group’s targeted $30bn of asset disposals it looks highly likely that Shell will be able to both cover its dividend and pay down additional debt during 2017.

So overall, it looks as if Shell’s 6.6% dividend yield isn’t going away any time soon.
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[sogoesit] 12/2/2017 18:06

Thanks for that waldron; interesting take on the BG deal.

[waldron] 11/2/2017 06:50

was asked to follow shares in a friends portfolio list


i was surprised that rdsb was not included

was told NEVER SELL SHELL


I BELIEVE RDSB MIGHT WELL BREAK THRU 2275 NEXT WEEK


TAKE CARE ALL

[waldron] 08/2/2017 19:53

Shell B Share News (RDSB)


Italian Prosecutors Request Eni CEO, Shell Stand Trial--Update
08/02/2017 7:43pm
Dow Jones News

Shell B (LSE:RDSB)
Intraday Stock Chart

Today : Wednesday 8 February 2017


By Eric Sylvers

MILAN -- Italian prosecutors have requested that Royal Dutch Shell PLC and the chief executive officer of Italian oil group Eni SpA stand trial over allegations of corruption tied to a large Nigerian oil deal, according to a person familiar with the situation.

The prosecutors have requested that Eni CEO Claudio Descalzi and 10 other people, including former Eni executives and Nigerian officials, be tried for alleged corruption tied to a deal Shell and Eni struck in 2011 to gain control of an offshore oil block in Nigeria.

At the time, the two companies won rights to the block after paying $1.3 billion. Eni paid the money to the Nigerian government, but about $1.1 billion was later transferred to a former oil minister, Dan Etete, according to documents from cases in the U.K. and Italy. Shell had already invested a large amount of money in the oil block and agreed to share the rights with the Italian group.

In documents reviewed by The Wall Street Journal, Italian magistrates have maintained that Mr. Descalzi, then the head of exploration, and Paolo Scaroni, Eni's CEO at the time, knew the government escrow account was a stopover for the money before it moved onto an account controlled by Mr. Etete and was eventually paid as kickbacks.

Mr. Descalzi took the helm in 2014 and has worked to refocus the companyand cuts costs to better prepare Eni to cope with low oil prices,

He and Eni have denied any wrongdoing. The company has maintained that it doesn't use middlemen and that its executives only dealt with the Nigerian government in the deal for the offshore block. Eni has said that it bears no responsibility for where the money subsequently went.

In a statement released Wednesday, Eni's board said that it believes Mr. Descalzi is innocent and expressed its support for the chief executive. A spokeswoman for Shell had no immediate comment.

It will take weeks or even months before an Italian judge rules on the prosecutors' request for a trial.

The requested indictments come just days after a Nigerian court ordered Eni and Shell to give up control of the large offshore oil block, which is known as OPL 245. Indictments in Italy could further embolden Nigerian officials to take on the two oil companies, according to analysts.

The Nigerian case has proved embarrassing not only for Eni, which has long been dogged by corruption allegations, but also the Italian government that owns 30% of the company and appoints the top management. Mr. Descalzi's three-year term is set to expire in April and his renewal could be complicated by the court case. A trial and eventual appeals could drag on for more than five years.

--Manuela Mesco contributed to this article.

Write to Eric Sylvers at [e-mail]



(END) Dow Jones Newswires

February 08, 2017 14:28 ET (19:28 GMT)

[mnomis] 08/2/2017 15:22

Looks like a good place to be buying back in to me ...

[essentialinvestor] 08/2/2017 15:02

Added a few.

[xxxxxy] 08/2/2017 09:47

Shell's Brent plans to spark North Sea jobs boost

[maywillow] 07/2/2017 23:17

Oil Prices Tank After API Reports 2nd Biggest Crude Build In U.S. History
By Julianne Geiger - Feb 07, 2017, 3:54 PM CST shale gas

U.S. crude oil inventories increased by a whopping 14.227 million barrels, according to this week’s American Petroleum Institute (API) inventory report published on Tuesday afternoon, pressing down further on already falling prices. The build is the second largest build in U.S. history, according to Zerohedge.

Analysts were anticipating a much more conservative crude oil inventory build of 2.38 million barrels, according to Market Realist.

While reduced OPEC production for January has seemed to support higher oil prices, reports of OPEC’s accomplishments have lost some sway in recent weeks in the wake of the American Petroleum Institute and the Energy Information Administration reports, which have both reported weeks of builds for crude oil, along with Baker Hughes, which showed that US drillers are putting rigs into production at rates not seen since mid-2014 before the oil price crash began.
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While OPEC is reporting a 91% compliance to the deal reached in November 2016, Baker Hughes reported a 17-rig gain for oil, which followed a 15-rig increase the week prior.

Prior to the API’s data release, Brent crude had traded down $0.22 since Friday’s rig count release. Brent crude was trading at $54.89 ($55.11 on Friday), while WTI crude traded at $52.03 ($52.83 on Friday).

Related: Oil Prices Fall Ahead Of Inventory Data

The API reported a 2.903-million-barrel build in gasoline inventories, and a 1.373-million-barrel build to distillates.

Supplies at the Cushing, Oklahoma, facility also rose this week by 624,000 barrels.

Last weeks’ EIA report showed a crude oil inventory build of 6.5 million barrels, which came a day after the API reported a 5.8-million-barrel build; and a 3.9-million-barrel build to gasoline compared with a 2.9-million-barrel build reported by the API.

By Julianne Geiger for Oilprice.com

[maywillow] 04/2/2017 11:09

This week’s top Shell stories

Shell news

Written by Alan Shields - 04/02/2017 7:00 am

Energy giant Shell was at the front and centre of some massive announcements this week that sent shockwaves through the oil and gas industry.

After lengthy speculation the Anglo-Dutch firm finally announced the $3.8billion sale of it’s North Sea assets to Chrysaor.

The package includes Shell’s interests in the Buzzard, Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine fields, plus a 10% stake in Schiehallion development.

The Press and Journal’s Energy editor Jeremy Cresswell was one of the first to hail the handover as a “terrific deal”.
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Shell boss says stop viewing North Sea with 'nostalgia'

He gave his insight into how much City sources knew about the deal and the movers and shakers who made it happen.

Hot on the heels of the announcement was Shell’s fourth quarter and full year results for 2016.

CEO Ben van Beurden said the supermajor was “streamlining its portfolio” following the landmark $52billion takeover of BG last year.

Van Beurden was also quick to comment that the asset sale did not signal the end of the energy giant’s involvement in the North Sea but warned of nostalgia.

The chief executive also said he did not anticipate any significant implications from Brexit.

[waldron] 03/2/2017 20:46

Slipped quietly into the 2275 to 2375 BOX

[waldron] 03/2/2017 10:40

CHEERS FJ

4 WEBCAST LINK

ENJOY YOUR WEEKEND GUYS

NICE AND SUNNY HERE

ALTHOUGH MORE RAIN AND PERHAPS A LITTLE SNOW EXPECTED

[sogoesit] 03/2/2017 10:02

It's also not a bad "trading" share, chief, but over 2-3 year periods or cycles.
A "trade" with the comfort of dividend support.
Have "traded" this way for about 30 years now.
Back-in today with a trade (accumulate); target 2750p
Good luck.

[chiefbrody] 03/2/2017 09:06

Just finished watching the full webcast. Seriously impressed. Have even more belief in the saying "Never sell Shell"Hold and accumulate until retirement. Me thinks.

[la forge] 03/2/2017 08:15

thanks again

have a nice weekend

despite the possibility of 40 days and nights of rain

[fjgooner] 02/2/2017 22:31

You are welcome La Forge,

BTW - I have watched many of these quarterly webcasts over the years and this one - whilst not being too overly bullish on the previous full-year or this latest quarter's results (quite rightly to reflect epoch-lows on crude and deferred tax liabilities) - has been far and away the most positive and confident presentation I can ever remember by Shell.

That is why I am so content with my investment in this company going through into the 2020s.

Advice to shorters - actually spend a couple of hours watching this webcast. And then you may wish to swiftly close your positions.

Happy days.

FJ
:)

[fjgooner] 02/2/2017 20:56

I watched today's 2016 Fourth quarter and full year results webcast. Most impressive.

It was very compelling viewing - and suggests that Shell is right at the sweet spot from here on into the 2020s.

You can watch it here, after clicking Agree and then Play under Webcast:

hxxp://cache.merchantcantos.com/webcast/webcaster/4000/7464/7468/69914/Lobby/default.htm

FJ
:)