Shell Share Discussion Threads

[fjgooner] 28/4/2018 12:48

You're welcome.

As April draws to a close, Brent crude stands at an average of $71.58 for Q2.

And it looks like oil may be getting more expensive before long.



OPEC cuts may go deeper as another member sees output slump

By Rupert Rowling and Grant Smith on 4/27/2018

LONDON (Bloomberg) -- While plunging output in Venezuela captures the oil world’s attention, problems are quietly festering in another OPEC nation.

Angola, once Africa’s biggest crude producer, is suffering sharp declines at under-invested offshore fields, with output dropping almost three times as much as the nation pledged in an accord with fellow OPEC members. With the losses set to accelerate -- a shipping program seen by Bloomberg News shows crude exports will fall in June to the lowest since at least 2008 -- the cartel risks tightening supply too much.

“Angola has a serious problem, with its decline rates becoming increasingly visible,” said Richard Mallinson, an analyst at consultants Energy Aspects Ltd. in London. “The low figure in June doesn’t look like a pattern of maintenance but points to steeper, structural declines.”

The Organization of Petroleum Exporting Countries and its allies have succeeded in wiping out an oil glut through production cuts launched in early 2017, boosting prices to a three-year high above $75/bbl. Their efforts have been aided by accidental losses in member nation Venezuela, which is cutting six times the amount it promised as a spiraling economic crisis batters its oil industry.

The risk OPEC faces now is tightening world markets too sharply, and sending prices to levels that either crimp oil demand or provoke a new tide of rival supply from the U.S. As Angola’s creeping decline adds to the ongoing slump in Venezuela, that danger only grows.

Output interruptions among the organization’s members could send Brent crude prices above $80/bbl, Bank of America Merrill Lynch analysts including Francisco Blanch, head of commodities research, said in a note to clients.

Unintended supply disruptions are rife in the cartel. Nigeria and Libya were exempt from the deal to cut output because their production had already been diminished by local instability, while Iraq’s implementation of the accord only improved after a political dispute halted exports. Some traders are already shunning Iranian crude in fear that President Donald Trump will re-impose sanctions.

Alleviating decline

Angola’s slide could be alleviated by the end of the year, with the start up of an oil field operated by Total SA. Kaombo field, delayed from 2017, will have a capacity of 230,000 bpd.

That might not come soon enough.

Although output from all oil fields diminishes over time as the pressure in their reservoirs falls, Angola’s deep-water operations are especially costly to maintain. Because of insufficient capital expenditure, the rate of decline from Angola’s deposits is more than double the global average, at 13% to 18%, Mallinson estimates.

“Most Angolan fields have struggled or entered into a steep decline phase after three years -- it’s the nature of the geological characteristics of Angola’s offshore production,” he said.

The country’s struggles will only intensify in coming years, the International Energy Agency predicts. Since peaking at 1.9 MMbpd in 2008, Angola’s production has slumped to about 1.5 million, and will dwindle to just under 1.3 MMbpd in 2023, according to the agency.

[grupo guitarlumber] 28/4/2018 12:39

WALDRON

you are welcome to come post on my threads anytime as are others tired of mediocre posts


it seems those who contribute little critise the most

fjgooner a special thanks for your contribution

[la forge] 28/4/2018 10:22

Announcement date April 26, 2018
Ex-dividend date (See Note 1) May 10, 2018
Record date May 11, 2018
Closing of currency election date (See Note 2) May 25, 2018
Pounds sterling and euro equivalents announcement date June 4, 2018
Payment date June 18, 2018

[waldron] 28/4/2018 06:58

CHUCKLE

ALL I CAN SAY TO THE LIKES OF Munin

is

SHELL IS A GREAT SHARE

IF YOU ALREADY HAVE THEM ITS A GOOD HOLD WITH A GOOD CHANCE TO MOVE UP

IF THERE IS A PULLBACK, IT MIGHT BE A GOOD OPPORTUNITY TO BUY IN

WITH THE TURMOIL IN THE WORLD OIL WILL NO DOUBT MOVE UP

my posts are aidememoires and if some can abstract something of use beyond my own
requirements,thats great too

again have a great and perhaps long weekend

A BRIGHT SUNNY SPRING MORNING THUS BEGINS

[the grumpy old men] 27/4/2018 19:25

Alexander Bueso
WebFG News
27 Apr, 2018 17:53 27 Apr, 2018 17:53
Broker tips: RBS, Royal Dutch Shell
rbs-dans-le-rouge-pour-la-huitieme-annee-d-affilee

ShoreCap stuck to a 'hold' recommendation for shares of RBS following the lender's 'in-line' first quarter figures, pointing to the yet unresolved outcome of the US Department of Justice's investigation into alleged historical mis-selling of residential mortgage-backed securities in the States.

That, after all, remained a key driver of the investment case for RBS, ShoreCap's Graeme Kyle said.

"While underlying operating performance is improving, the outlook continues to be overshadowed by the impending US RMBS settlement with the DOJ for which the timescale is out of the group's control," Graeme said in a research report sent to clients.

"Note that our dividend forecasts is predicated on the US RMBS settlement being resolved in the current financial year," he added.

Indeed, the 'tail risk' associated with the risk of future misconduct redress and litigation costs translated into a 20% haircut for on the broker's fair value estimate for the shares, then at 265p.

"We will await the resolution of the US RMBS settlement before deciding whether it is appropriate to take a more active stance on the shares and retain our current preferences for Lloyds."

Analysts at Credit Suisse revised their target price for oil major Royal Dutch Shell higher, citing recent changes to their macro forecasts, at the same time that they highlighted the existence of several key positives for the shares.

However, they continued to see a need for further deleveraging, also pointing out that it was over-resourced in some areas.

Chief among the positive aspects highlighted by the Swiss broker was the oil major's shift towards a less capital-intensive version of its former self with more scale and "scope around key focus areas", which had allowed it to de-risk its dividend.

In a research note sent to clients, Thomas Adolff, Ilkin Karimli and Yaroslav Rumyantsev also pointed to the power of Shell's integrated value chain in Downstream, its good mix of opportunities across different themes and its technology innovation.

However, its cash conversion during the second quarter was labeled as "suboptimal" - for a second month in a row - although the Swiss broker conceded that was largely the result of non-recurring items.

To take note of as well, the investment bank also said that further deleveraging was required before the company's share buyback plans could go ahead.

Credit Suisse revised its target price for the shares from 2,750p to 2,850p, reiterating an 'outperform' recommendation.

[the grumpy old men] 27/4/2018 19:00

MUNIM

when you start making a decent contribution to this thread , then you can perhaps
make a critic as a frequent reader or poster

it certainly helps sometimes to understand or question market and share price movements
and then look for reasons for same

and yes sometimes stroll passed

[munin] 27/4/2018 18:27

Do any of you read that Waldron Gubbins.......or just scroll past it?

[waldron] 27/4/2018 17:23

Total
52.1 +0.37%



Engie
14.435 +0.73%

Orange
15.035 +0.07%


BP
537.4 +0.39%



Shell A
2,531.5 +1.16%



Shell B
2,596 +1.05%


FTSE 100
7,502.21 +1.09%
Dow Jones
24,253.38 -0.28%
CAC 40
5,483.19 +0.54%



Brent Crude Oil NYMEX 73.69 -0.27%
Gasoline NYMEX 2.12 +0.07%
Natural Gas NYMEX 2.77 -1.88%



SO THE WEEK ENDETH WITH SHELLB SNUG IN THE 2575 to 2675 BOX WITH IT NO DOUBT MOVING
BEYOND 2675 UNTIL SLIPPING BACK AROUND 1O MAY EX DIVI DAY

PREMIUM 64.5p it seems

take care and enjoy your weekend

[ariane] 27/4/2018 14:45

Big Oil Firms Hold Back on Drilling -- Update
27/04/2018 2:31pm
Dow Jones News

Shell A (LSE:RDSA)
Intraday Stock Chart

Today : Friday 27 April 2018
Click Here for more Shell A Charts.

By Bradley Olson and Sarah Kent

The world's biggest oil companies are awash in cash, thanks to rising crude prices. But few, if any, are going on spending sprees, even as the prospect of a global oil shortage looms.

Western energy giants including Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC just posted their best first-quarter profits in years, with most besting a time when crude sold for more than $100 a barrel.

Yet despite a 50% surge in prices since last year, drilling budgets at the largest oil-and-gas companies are up only about 7%, according to consultancy Wood Mackenzie.

Large publicly traded oil companies are moving carefully because they are under pressure from investors after spending heavily over the past decade when prices were higher, only to generate underwhelming returns.

"The newfound religion and confidence in the sector is, to say the least, fragile," said Shell Chief Executive Ben van Beurden. "We'll need to show a little longer that we actually mean what we say in terms of capital discipline."

By contrast, smaller U.S. shale producers -- especially those backed by private equity -- have seized on the opportunity to ramp up drilling and gain market share.

Two years ago, the top 30 U.S. companies accounted for almost 64% of production. That percentage has fallen to 60% this year, according to consultancy Rystad Energy.

"Big companies are still cutting coupons to show that they can live within their means," said Adam Flikerski, managing partner at BlackGold Capital Management LP, an asset manager that specializes in oil and gas lending. "Like technology companies, the smaller players are still rewarded for growth."

The wary response from the world's biggest producers comes as a global oil glut that has hung over the industry for the past four years finally appears to be withering away. Without stepped-up spending on new oil production, the International Energy Agency warns, the world could flip from abundance to supply crunch by 2020.

A lack of investment is "potentially storing up trouble for the future," the Paris-based agency said last month.

Still, many investors in publicly traded oil and gas producers are pressing executives not to sow the seeds of another price crash with excessive growth. Their apathy about oil's rally has shown.

While the price of Brent crude, the international oil benchmark, is up around 11% this year, a leading barometer of energy stocks, the MSCI World Energy Index, is only up around 4%. A number of companies have performed even worse. Exxon is down 3.9%.

The pace of share buybacks has been a key factor for performance so far. ConocoPhillips shares rose 3% Thursday after the company disclosed it had repurchased about $500 million in stock, as it reported that quarterly profits jumped 52% to $888 million.

Exxon fell 2% Friday in pre-market trading after announcing that it has not yet reinstated its longstanding program for buying back shares. Although the company posted its highest cash flow since 2014, it still fell short of analyst expectations for the second straight quarter. Profits rose 16% to $4.65 billion compared with the first three months of last year.

Shell's U.K. shares on Thursday fell 0.7% after the company missed cash flow expectations and failed to give more clarity on when it would begin buying back $25 billion in stock, as it reported quarterly profits rose by two-thirds to nearly $6 billion.

Chevron's stock rose 1.8% Friday after the company said first-quarter profits were $3.6 billion, up 36% from a year ago.

France's Total SA announced a 3.2% dividend increase Thursday. Chief Executive Patrick Pouyanne said the company will use the excess cash it rakes in with oil above $70 a barrel to reward shareholders with higher dividends and share buybacks.

"Some of you may be worried about the financial discipline, but I can tell you we keep in mind the discipline," Mr. Pouyanne told analysts.

Combined, profits at Exxon, Chevron, Shell and Total were $16.8 billion, the highest since 2014.

Sanford C. Bernstein expects the world's biggest oil companies to generate record amounts of cash in excess of new investments this year.

The spending constraints aren't so restrictive that the biggest companies are avoiding new developments completely. BP PLC, which reports earnings next week, sanctioned several new projects this month, including the second project in a $6 billion natural gas development in India.

Earlier this week, Shell announced plans for a new deep water project in the Gulf of Mexico. Exxon may take a final investment decision later this year on a new facility to manufacture polypropylene, a widely used form of plastic.

One reason for caution among larger companies is that some analysts, investors and executives still lack faith that crude prices will remain elevated through the end of the year.

"There's potential weakness on the horizon in oil prices," said Tom Ellacott, senior vice president for corporate research at Wood Mackenzie. "It's still quite an uncertain environment."

Smaller U.S. producers are exercising less caution, as many of them still have business models akin to startups'. They must invest in new wells to prove the viability of new prospects.

Those companies are a major reason why forecasters say U.S. oil output may reach 11 million barrels a day by the end of the year, surpassing the output of Saudi Arabia.

In February, companies that aren't among the top U.S. crude producers made up almost half the permits approved for new drilling, according to data and analytics firm DrillingInfo. In the past six months, those operators accounted for about 42% of permits. Permits are generally a useful barometer for future drilling activity.

Many such companies will be affected by shortages in labor and trucking, as well as pipeline bottlenecks in the Permian basin in West Texas and New Mexico, the heart of U.S. drilling activity. Those challenges could curtail production by about 400,000 barrels a day, but output will continue surging as many companies have secured the supplies and contracts needed to meet their goals, said Artem Abramov, vice president of analysis at analytics firm Rystad.

"We've got a completely new generation of small, private players with very ambitious growth plans in the Permian basin," he said. "Those plans will continue."

Write to Bradley Olson at [e-mail] and Sarah Kent at [e-mail]



(END) Dow Jones Newswires

April 27, 2018 09:16 ET (13:16 GMT)

[petepitstop] 27/4/2018 13:51

It is an issue as Oklahoma is now the most seismic state in the USA overtaking California due to fracking activity. There is a large frack free zone around Cushing Oklahoma which is their largest storage and oil hub. For my sins, I lost money in IOF which is based there.

[trev1223] 27/4/2018 13:33

Pete: They would, wouldn't they.

[petepitstop] 27/4/2018 13:12

Guardian reports the 5.5 magnitude earthquake in South Korea last November may have been caused by fracking.

[fjgooner] 27/4/2018 12:34

The key thing is that a company is clearly seen to be maintaining a sufficient program of capex to drive future profits AND IS ALSO ABLE to offer a share buyback program with the excess profits.

Shell has been 100% clear that this is the case here with its $25B to $30B capex per annum plus approx $10B buybacks per annum, so this buyback program - once initiated - is to be celebrated.

[ariane] 27/4/2018 12:08

Shell writes off entire investment in troubled gas venture NAM Business April 26, 2018 Photo: Depositphotos.com Shell has written off its entire $244m investment in gas production company NAM in a move seen as a further attempt to distance itself from the troubled company. NAM is a 50-50 joint venture between Shell and ExxonMobil and faces huge damages claims because of the earthquakes in Groningen province which have been caused by the extraction of natural gas. The one-off charge was booked in first-quarter earnings published on Thursday, according to the Financieele Dagblad. The Dutch government plans to shut off production of gas from the northern Groningen field by 2030 and pull back production sharply before that. The cost of shoring up houses hit by subsidence is put at between €1bn and €30bn and is to be shared by the state and the oil companies. In addition, some €50bn to €125bn worth of gas will remain underground. And documents from 2016 show the oil companies may make a claim against the Dutch state for lost income. Shell booked first-quarter net profit 43% higher at $5.3bn, far above analysts expectations. The earnings increase was ascribed to higher gas and oil prices. Operational cash flow was virtually unchanged at $9.4bn. The Anglo-Dutch company, sixth largest in the world, is proposing to maintain its $0.47 per share dividend.

Read more at DutchNews.nl:

[ianood] 27/4/2018 11:28

"Excess money should be paid to the shareholders if not needed for the running of the company, not used to put more money in the directors pockets,we own the company not them,we are taking the risks with our money.."

Can't agree when they are over capitalised it's good to get the numbers down a bit particularly when you look at the increase in number of shares as a result of scrip in lieu of dividend. The same can be said about Lloyds bank after the dilutionary rights issue that occurred during the banking crisis.

If you don't trust the directors then don't own the company!

[2hoggy] 27/4/2018 11:17

Buy backs can be also used by directors to pump up the share price artificially to give them much bigger bonus.

When national grid kept back money from their sale of the gas supply line to buy back shares it looked like a disaster as the more they bought the price went down,also they always seemed to buy them at the highest price so I don't think its always the best thing to do.

Excess money should be paid to the shareholders if not needed for the running of the company, not used to put more money in the directors pockets,we own the company not them,we are taking the risks with our money..

[enturner] 27/4/2018 09:34

Hi. Could someone please explain the mechanics of a share buyback and how it will impact us as investors? Just so there are no surprises going forward. Thanks.

[waldron] 27/4/2018 08:43

Shell Remains Undervalued, say Analysts
Morningstar equity analysts remain confident in the oil company’s financial framework after strong first quarter earnings
Allen Good
27 April, 2018 | 8:31AM

Shell Profits

Despite strong earnings growth that largely met expectations, shares in Shell (RDSB) sold off as cash flow did not increase to the degree that was expected given the increase in oil prices. While Shell has already delivered on key targets, such as restoring its full cash and nearly achieving its goal of disposing $30 billion in assets, improvement in cash flow and reduction in debt has stalled.

Clearly the market is concerned, but Morningstar equity analysts remain confident in the company’s financial framework for the next three years as the absence of cash flow growth and debt reduction is largely explainable by one-off events that will eventually subside. We are maintaining our fair value estimate of £28.00 – against a current price of around £25.60 – after incorporating first quarter 2018 results and higher near-term oil prices into our forecast – we assume Brent prices of $70 per barrel in 2018 and $68 in 2019. Our long-term oil-price assumption is $60.

In our opinion the underlying strength of the business is intact, as demonstrated by the strong earnings. Admittedly, though, the market will likely need to see evidence that these are in fact not underlying issues in future quarterly results before fully crediting Shell’s shares. That said, our fair value estimate is unchanged, leaving Shell one of the more attractively valued global integrated oil platers in our view.

With the restoration of its cash dividend, Shell has demonstrated that it has taken the necessary steps to remain competitive in a world of $60/barrel oil. Like the rest of the integrated group, Shell has reduced its cost base, which had become bloated, in part by reducing headcount and improving its supply chain. Furthermore, the addition of BG’s low-cost production reduces Shell’s per-barrel operating cost, which ranked among the highest in its peer group. Shell already reduced operating cost by 20% from 2014 levels and holds that potential further reductions are possible in later years.

At the same time, Shell plans to avoid the mistakes of the past, when rising commodity prices resulted in ever-increasing capital budgets, by keeping yearly capital spending between $25 billion and $30 billion through 2020, a 40% reduction from the nearly $50 billion it spent in 2014. The sharp decrease should improve capital efficiency, but should not completely sacrifice growth. While the reduction in spending is in part a function of cancelled marginal projects that are no longer economical, it also results from cost deflation, improved performance, and design standardisation, which have meaningfully improved potential returns and reduced total project spend.

[chiefbrody] 27/4/2018 07:26

2 years of divs at least if the $25B of buybacks was paid out. Guess that would be around 250p a share. If the buybacks take us up to 30 squid a share over the next couple of years, no matter :-)