Shell Share Discussion Threads

[sogoesit] 03/2/2019 13:31

Hi waldron,

Pricing is "utility type" so that these providers have their capital costs, including service profitability, covered for contract duration. The proportion of capacity against energy varies depending on capital intensity. The energy content is on a "pass through" or tolling basis so, even with that, there is a measure of margin baked in.

Revenues overall will be significantly flattened ("spikeless"), "guaranteed" and with NPV payback assured making them pretty "smooth" over contract lifetime.

Overall risk remains in market supply and demand, creditworthiness, national security of supply and demand etc. And the provider being cost competitive (capacity charges).

Shell's activity in this arena is probably classified as Midstream but is largely Utility in nature which is, financially, more stable than Downstream even so long as the commercialisation is not internalised.

[waldron] 03/2/2019 13:13

Sogoesit
3 Feb '19 - 12:56 - 4929 of 4929

must admit a little above my ability of absorbtion but thanks anyways

does it mean in short that spikes up or down during the current year are contained and perhaps as far out as 20years

sorry if i appear totally ignorant

[sogoesit] 03/2/2019 12:56

GAS PRICING - LNG

Some of you were asking about the background to (international) gas pricing which I responded to a few weeks ago. Here is some further (public domain) information to give you a glimpse into (i) the long term contracted nature, and structure, of its commercialisation and (ii) the pricing mechanisms employed.

[Anyone familiar with power generation will also note the separation of pricing into 2 components, capacity charges (fixed fees) and energy charges (variable fees). More info. on PPA's, where a lot of LNG is destined for base load powergen, can be found here for those interested -

Note that LNG is priced at more than double spot, at about more than $8/mmBtu.

Excerpted from Cheniere's (Ticker LNG on NYSE) 2017 Annual Report:

"SPL has entered into six fixed price SPAs with terms of at least 20 years (plus extension rights) with third parties to make available an aggregate amount of LNG that is between approximately 80% to 95% of the expected aggregate adjusted nominal production capacity of Trains 1 through 5. Under these SPAs, the customers will purchase LNG from SPL for a price consisting of a fixed fee per MMBtu of LNG (a portion of which is subject to annual adjustment for inflation) plus a variable fee per MMBtu of LNG equal to approximately 115% of Henry Hub. In certain circumstances, the customers may elect to cancel or suspend deliveries of LNG cargoes, in which case the customers would still be required to pay the fixed fee with respect to the contracted volumes that are not delivered as a result of such cancellation or suspension. We refer to the fee component that is applicable regardless of a cancellation or suspension of LNG cargo deliveries under the SPAs as the fixed fee component of the price under SPL’s SPAs. We refer to the fee component that is applicable only in connection with LNG cargo deliveries as the variable fee component of the price under SPL’s SPAs. The variable fees under SPL’s SPAs were sized at the time of entry into each SPA with the intent to cover the costs of gas purchases and transportation related to, and operating and maintenance costs to produce, the LNG to be sold under each such SPA. The SPAs and contracted volumes to be made available under the SPAs are not tied to a specific Train; however, the term of each SPA generally commences upon the date of first commercial delivery of a specified Train. Under SPL’s SPA with BG Gulf Coast LNG, LLC (“BG”), BG has contracted for volumes related to Trains 3 and 4 for which the obligation to make LNG available to BG is expected to commence approximately one year after the date of first commercial delivery for the respective Train.
In aggregate, the annual fixed fee portion to be paid by the third-party SPA customers is approximately $1.6 billion for Trains 1 through 3, increasing to $2.3 billion upon the date of first commercial delivery of Train 4 and to $2.9 billion upon the date of first commercial delivery of Train 5, with the applicable fixed fees starting from the date of first commercial delivery from the applicable Train, as specified in each SPA."

Cheniere's site here - (I hold LNG and CQP).

[ariane] 03/2/2019 07:56

The silver lining for oil in Venezuela's crisis

Country may disappear as a significant factor in the oil market for years

Robin Mills

February 3, 2019

In his tale of the last days of Simón Bolívar, liberator of Venezuela from colonialism, Gabriel García Marquez has his character say, “the United States is omnipotent and terrible, and its tale of liberty will end in a plague of miseries for us all”. The US’s latest attempt at decisive action in Venezuela’s politics is intended to end such a plague, using its power over oil.

[ariane] 03/2/2019 07:50

Shell subsidiary to pay $2.2M fine for 2016 Gulf oil spill

The Associated Press

February 02, 2019 04:08 PM,

Updated 9 hours 42 minutes ago
NEW ORLEANS

A subsidiary of Royal Dutch Shell has agreed to pay a $2.2 million civil fine to the federal government to settle charges that the company violated the Clean Water Act by spilling 1,900 barrels of oil into the Gulf of Mexico in May 2016 when a subsea pipeline cracked at the company's Green Canyon oil field.

Shell Offshore's fine, announced in the Federal Register on Friday, will be paid after the expiration of a 30-day comment period, NOLA.com/The Times-Picayune reported. The money will be deposited in the Oil Spill Liability Trust Fund, which is used to pay for oil spill cleanups.

The new fine is in addition to $3.9 million the company agreed to pay to state and federal agencies in July to settle natural resource damage charges stemming from the spill. About $3.5 million of that settlement will be used for natural resource restoration projects, with the rest aimed at repaying the agencies' costs in responding to the spill.

Read more here:

[ariane] 03/2/2019 07:34

A little off topic




but

BEWARE OF ROBOT NEWS, SHARE PRICES, SHARE ADVICE AND ANALYSIS

[adrian j boris] 02/2/2019 19:37

Shell Offshore to pay $2.2M fine for 2016 Gulf oil spill

The Associated Press

February 02, 2019 01:27 PM,

Updated 8 minutes ago
NEW ORLEANS

Shell Offshore Inc. has agreed to pay a $2.2 million civil fine to the federal government to settle charges that the company violated the Clean Water Act by spilling 1,900 barrels of oil into the Gulf of Mexico in May 2016 when a subsea pipeline cracked at the company's Green Canyon oil field.

NOLA.com/The Times-Picayune reports the fine, announced in the Federal Register on Friday, will be paid after the expiration of a 30-day comment period. The money will be deposited in the Oil Spill Liability Trust Fund, which is used to pay for oil spill cleanups.

The new fine is in addition to $3.9 million the company agreed to pay to state and federal agencies in July to settle natural resource damage charges stemming from the spill.

Read more here:

[adrian j boris] 02/2/2019 19:35

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (February 2, 2019).

HOUSTON -- The world's largest Western oil companies shrugged off a 38% plunge in oil prices during the final months of 2018 to post some of their biggest annual profits in years.

Strong fourth-quarter earnings Friday by Exxon Mobil Corp. and Chevron Corp., following similar results by Royal Dutch Shell PLC on Thursday, proved the extent to which the oil giants have transformed amid lower crude prices.

The top five generated more profits last year, when crude prices averaged just $71 a barrel, than in 2014, when global crude sold for an average of almost $100 a barrel.

Including estimates for BP PLC and Total SA, which report next week, they are set to post 2018 profits of about $84 billion, according to FactSet data. That is about $10 billion more than four years ago.

The companies are seeing benefits from a more disciplined strategy focused on returns and profitability over growing production, a demand from many investors who have been disappointed by lackluster performance in recent years. Exxon and Chevron stock prices rallied by more than 3%. Shell's U.S.-denominated shares rose by more than 4% Thursday, the most in three months Chevron's board authorized a $25 billion share repurchase program after the company bought back $1 billion in stock in the fourth quarter, a signal to investors that returns continue to be a top priority.

Collectively, the companies have restructured their businesses, sold off assets and positioned themselves to thrive even when crude prices swing up and down wildly.

Exxon, Chevron, BP and Shell are also turning to U.S. shale drilling in the booming Permian Basin in West Texas and New Mexico, where it is possible to increase production without a multibillion-dollar project that could take at least a decade to make money.

Despite the fall in prices at the end of the fourth quarter, Exxon still generated $6 billion in net income in the period -- lower than the year before, which was boosted by the U.S. tax overhaul, but still better than analysts had expected. Chevron said net income was $3.73 billion, up 19% from the same time a year ago.

"These companies have figured out how to operate in this new environment, and they have adjusted well" to lower prices, said Brian Youngberg, an analyst at Edward Jones in St. Louis.

"The key going forward will be maintaining discipline. This is now a low-growth industry, so you've got to invest well," he added.

Exxon and Chevron stock prices rallied by more than 3%. Shell's U.S.-denominated shares rose by more than 4% Thursday, the most in three months. Chevron's board authorized a $25 billion share repurchase program after the company bought back $1 billion in stock in the fourth quarter, a signal to investors that returns continue to be a top priority.

Shell, Exxon and Chevron shares have rallied. Chevron's board authorized a $25 billion share repurchase program, signaling to investors that returns continue to be a priority.

On Thursday, Shell said it nearly doubled profits in 2018 from the previous year, posting net income of about $23 billion.

Production at Exxon rose above 4 million barrels a day of oil and gas for the first time since early 2017.

Exxon Chief Executive Darren Woods has embarked on a $230 billion plan to revitalize the oil giant, targeting drilling opportunities around the world that he has said are the most attractive he's seen in decades. Those include shale wells in West Texas, natural gas export facilities in Papua New Guinea, a string of giant discoveries in the South American nation of Guyana and developments in Mozambique and Brazil.

While many analysts consider those projects to be extremely attractive, they aren't set to pay off in a big way for a few more years.

Exxon's shares fell about 15% in 2018, including dividends, the worst performance for the company in at least 20 years, according to FactSet data.

Mr. Woods said the company's ability to produce massive amounts of oil and gas while also having the logistics and refining capability to process barrels into fuel and other products was a critical bulwark in 2018.

"The price environment in 2018 was unpredictable, which once again demonstrated the value of our integrated business model," Mr. Woods said. That vertical integration "allowed us to avoid the impact of market dislocations and thus capture the full value of our barrels," he added.

Mr. Woods also signaled that Exxon is set to step up asset sales in its exploration and production business, which he plans to reorganize into three new companies beginning in April.

The company recorded a $429 million impairment charge in the quarter, much of which was from assets in North America "with limited development potential." Total revenue and other income rose 8.1% to $72 billion.

Chevron Chief Executive Mike Wirth said the company has been in discussions with U.S. officials related to its operations in Venezuela and believes they will continue operating in a safe and stable way for the foreseeable future. Chevron was among the companies that received an exemption from U.S. sanctions imposed this week against Venezuela's oil industry.

The exemption is set to expire in later this year, but it is possible several companies may continue to receive waivers, according to analysts.

Chevron plans to continue buying back significant quantities of shares, and the company is set to purchase a Texas refinery. That will allow the company to step up how much light crude it can process as it ramps up production in the Permian Basin. Like Exxon, Chevron nearly doubled its output in the region in 2018.

"We continue to maintain our commitment to capital discipline," Mr. Wirth said. "We intend to win in any environment."

Total revenues at Chevron rose 13% to $42 billion, and production of oil and gas rose 7% to the equivalent of 2.93 million barrels a day.

Excluding asset sales, the company said it expects production to grow by 4% to 7% in 2019.

Allison Prang and Kimberly Chin contributed to this article.

Write to Bradley Olson at [e-mail]



(END) Dow Jones Newswires

February 02, 2019 02:47 ET (07:47 GMT)

[sarkasm] 02/2/2019 17:15

Have decided to bring silly chance predictions to the BB

TARGET PRICE WITHIN 3 MONTHS 2765p

[sarkasm] 02/2/2019 16:13

Better Buy: ExxonMobil vs. Royal Dutch Shell
Shell easily beats Exxon when you look at dividend yield, but does that make it the better buy?
Reuben Gregg Brewer
Reuben Gregg Brewer
(TMFReubenGBrewer)
Feb 2, 2019 at 9:04AM

ExxonMobil Corporation (NYSE:XOM) and Royal Dutch Shell plc (NYSE:RDS-B) are giant, diversified oil and natural gas companies. Exxon's yield is around 4.5%, while Shell's is an even more impressive 6.1%. They are very similar companies in many ways, but you need to know more than just that yield statistic to understand which is the better buy for you.
A look at today

Exxon and Shell both offer investors exposure to the upstream energy sector via their massive oil and natural gas drilling businesses. This is the main driver of each company's top and bottom lines. However, that's not all either company does. Both have balanced that upstream operation against downstream assets in the chemicals and refining spaces. These businesses tend to do better when energy prices are low because oil and natural gas are key inputs. This diversification helps to offset the pain of oil downturns.
A man in a hard hat and hi-vis vest looking down over an oil processing plant

Image source: Getty Images.

One key difference between the two, though, can be found on their balance sheets. Exxon has historically focused on keeping long-term debt to a minimum. At the height of the last oil downturn, long-term debt at the company was just 15% of the capital structure. Currently, that figure is around 10%. This gives the oil major a huge amount of financial flexibility during downturns because it can add debt to help support its business.

Shell makes greater use of long-term debt, which sits at around 20% of the capital structure today. Offsetting that greater use of leverage, though, is a larger cash balance. Shell holds about $20 billion in cash compared to Exxon's roughly $6 billion. Stepping back, it would be easy to look at this issue as a wash. However, it had a material impact on how each company maneuvered through the deep oil downturn that started in mid-2014.

XOM Dividend Per Share (Quarterly) Chart

XOM Dividend Per Share (Quarterly) data by YCharts.

Shell paused dividend increases and instituted a scrip dividend (paying dividends in additional shares instead of cash to preserve money). Exxon kept increasing its dividend every year right through the downturn. In fact, Shell's dividend hasn't been increased since 2014. It has ceased the scrip dividend, which is a step in the right direction, but investors have yet to be rewarded with dividend growth. With oil prices hitting another soft patch recently, a dividend hike in the near term would seem unlikely, too. If dividend growth is important to you, Exxon's dividend record is easily one of the best in the oil and gas space. The higher yield at Shell is partly a reflection of the differences here.
A look to the future

Exxon and Shell, then, are two diversified energy giants that have slightly different approaches to using their balance sheets. This isn't a minor issue, since it has had a material impact on their dividend policies. But there's another big issue facing both companies that investors need to think about: carbon.

XOM Total Long Term Debt (Annual) Chart

XOM Total Long Term Debt (Annual) data by YCharts.

Exxon has been very slow to address the issue at all, finding itself in court accused of, to simplify a very complicated legal case, lying to investors about what it knew about global warming. At this point, it is embracing the issue more fully, calling for a carbon tax. It has also been working to increase its exposure to natural gas, a fuel expected to help the world transition to carbon-fee power, like solar and wind.

What Exxon hasn't done is materially alter its business focus. It believes that oil and natural gas will remain important for decades to come, and that it should keep drilling for these depleting assets to ensure there's enough to go around. It currently has plans to spend as much $30 billion a year through 2025 to support long-term production growth. If you are looking at Exxon, you need to buy into the idea that oil and natural gas will remain vital sources of energy for many years into the future.

Shell, while still highly dependent on oil and natural gas, has been far more vocal about the need to start addressing carbon today. It has taken notable steps to shift its business, including buying solar power assets, investing in wind turbines, and even buying an electric vehicle charging station company. Shell is building an electricity business that it believes will someday sit beside its oil and gas assets, and it is putting billions into this diversification effort. It's not that Exxon is sitting still with regard to carbon, but Shell is definitely taking a more aggressive approach to shifting its exposure. If that sounds like the right move to you, then you'll probably want to invest in Shell instead of Exxon.
Two good companies

To be fair, it's hard to make a clear call between Exxon and Shell. They are both very well-run and diversified energy companies that reward investors with fat dividend checks. You probably wouldn't go wrong buying either one of them. But before you simply choose the one with the higher yield, you need to step back and look at some of the important nuances. The use of leverage has had a material impact on each company's dividend. And their differing views of the future are starting to show up in the capital investments each company has made.

Neither of these issues matter if you only plan to hold Exxon or Shell for a couple of months. But if your intended holding period is measured in years or decades, then you'll want to carefully consider debt policies and corporation direction -- which are, perhaps, the two biggest differences between Shell and Exxon today.

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[grupo guitarlumber] 02/2/2019 11:36

Operators make handful of important deepwater discoveries in 2018
01/01/2019
Norphlet play figures prominently in new findings
Bruce Beaubouef, Managing Editor

The outlook for deepwater drilling in the Gulf of Mexico has been slowly improving over the past year. The number of drilling rigs in the Gulf is up by four, from 19 to 23, compared to last year, according to the Baker Hughes rig count of Dec. 14, 2018. And that number is up by one compared to two years ago (2016), when the active US GoM rig count stood at 22.

And, operators reported finding a number of new and important oil discoveries in the deepwater US Gulf in 2018.

In January, both Shell and Total announced new deepwater discoveries. Shell Offshore Inc. reported that it had made one of its largest US Gulf of Mexico exploration finds in the past decade from its Whale deepwater well. The well encountered more than 1,400 net ft (427 m) of oil-bearing pay. Evaluation of the discovery is ongoing, and appraisal drilling is under way to further delineate the discovery and define development options.

[waldron] 02/2/2019 08:05

OILWORLD


Shell, partners start deep-water production at Lula North in Brazil
2/1/2019
null
FPSO P-67 operated by Petrobras. Photo: Shell.

RIO DE JANEIRO -- Royal Dutch Shell plc, through its subsidiary Shell Brasil Petróleo Ltda. and consortium partners have announced the start of production at the Lula North deepwater project in the Brazilian Santos Basin.

Production at Lula North is processed by the P-67 floating production and storage offloading vessel (FPSO) and is operated by Petrobras. The production hub is the seventh FPSO deployed at Lula and the third in a series of standardized vessels built for the consortium. It is designed to process up to 150,000 bbl of oil and 6 MMm3 of natural gas per day.

Shell and its partners began production at Lula Extreme South with the P-69 FPSO in October 2018.

Shell has a 25% stake in the Lula consortium, operated by Petrobras (65%). Galp, through its subsidiary Petrogal Brasil, holds the remaining 10% interest. Discovered in 2006, Lula is the largest producing field in Brazil and accounts for 30% of the country's oil and gas production.

[waldron] 02/2/2019 07:24

thanks for that FJG

IN this case i stand corrected

i guess i am some times irritated by certain rare posters posting not so nice things especially regarding politics and brexit

pete cheers

have a great weekend

Edit i must add however that shell is not the only oil major that is undervalued chuckle

[fjgooner] 01/2/2019 21:20

Pete is exactly right in post 4911 - Ben made that point in just that way.

My take was that Ben's frustration is with how some investor sentiment (e.g. analysts & brokers) have so far completely failed to reflect the turnaround that has been engineered over the last 5 years.

For those who weren't around at the time, a few years back a key concern was that oil super-majors were wasting their income on mega-expensive projects in a pointless race against their peers. Shell was rightly criticised for the huge waste of money in marginal or extremely high-odds plays such as (in my view the horrendous idea of) Arctic development.

And money WAS wasted - many billions of dollars.

In recent years at Shell, the culture has entirely changed. No vanity projects for a CEO to make his (or her) mark in company history. The removal of the dirtiest and most economically questionable sands plays. The re-focussing on a simplified core business, clearly predicated on the energy transition (via LNG, BG acquisition, New Motion etc.) and on shareholder returns.

So, as Pete posted, Ben's irritation is that investor sentiment has yet to acknowledge this new reality.

I would be irritated too given the huge progress made thus far.

FJ

[petepitstop] 01/2/2019 20:36

Sentiment is poor with regard to the company. I have shares in Scottish Investment Trust (SCIN) which is a contrarian trust and it has Shell as one of their top holdings. There would not be a 25 billion USD share buy_back in play if there was not value to be had.

[waldron] 01/2/2019 18:52

and pete whats your point or takeaway from this apparent comment

with 101 posts to your credit, we cannot truly take your post seriously

[petepitstop] 01/2/2019 18:49

The CEO was asked what he learned in his 5 years in charge on the webcast. His overriding thought was how long it is taking for investor sentiment to improve towards Shell.

[waldron] 01/2/2019 18:30

Royal Dutch Shell PLC (RDSB.LN) said Friday that it has begun production at the Lula North deep-water project in Brazil with its consortium partners.

The energy company has a 25% stake in the consortium operating the project. Production at Lula North is processed by a floating storage-and-production vessel designed to process up to 150,000 barrels of oil, as well as 6 million meters of natural gas a day, Shell said.



Write to Carlo Martuscelli at [e-mail]



(END) Dow Jones Newswires

February 01, 2019 12:39 ET (17:39 GMT)

[sarkasm] 01/2/2019 17:39

Royal Dutch Shell PLC (RDSA) said Friday that production started at the Lula North deep-water project in the Brazilian Santos Basin.

Production at Lula North is processed by the P-67 floating production and storage offloading vessel and is operated by Petroleo Brasileiro SA (PBR).

The production hub is designed to process up to 150,000 barrels of oil and 6 million cubic meters of natural gas per day.

Shell has a 25% stake in the Lula consortium, operated by Petrobras, with 65%. Galp Energia (GALP.LB), through its subsidiary Petrogal Brasil, holds the remaining 10%.



Write to Michael Dabaie at [e-mail]



(END) Dow Jones Newswires

February 01, 2019 12:00 ET (17:00 GMT)

[sogoesit] 01/2/2019 17:30

My expectation this week was that there might be a "catch-up" in valuation but I have been disappointed as there is little material change. (Although the "traders" say they made money... haha!)

Either my valuation expectations are wrong or the market still is.
Still, the dividends keep on coming so the cushion is still there.
Another year will tell, hopefully!