Shell Share Discussion Threads

[gateside] 04/6/2019 16:30

Totally Agree. They are a great company. Sometimes I think I should sell my whole portfolio and put the whole lot in RDSB

[fjgooner] 04/6/2019 14:05

I've just watched the Live Management Day webcast and Q&As - nearly 3 hours of it. Plenty of good stuff to go through, so here is a link to the webcast slides.

Page 12 reads rather well. :)

[fjgooner] 04/6/2019 10:39

How anyone can watch that Investor Presentation and not immediately rush back to their computer to hit the Shell Buy button is utterly beyond me.

What a great company we are invested in for the decade ahead.

Very happy.

[skinny] 04/6/2019 09:57

BP added as comparison - Brent just turned green.

[11_percent] 04/6/2019 09:47

Interesting graph Skinny...….we are a bit volatile, generally to the down side.

[skinny] 04/6/2019 09:18

Brent / RDSB.

[the grumpy old men] 04/6/2019 09:16

With all this exciting news, i would have thought a share price move up


Royal Dutch Shell
2,473 -0.58%

[the grumpy old men] 04/6/2019 09:13

Royal Dutch Shell PLC (RDSB.LN) expects to return $125 billion or more to shareholders from 2021 to 2025 via dividends and buybacks, the Anglo-Dutch company said Tuesday.

The integrated energy giant raised its guidance for organic free cash flow in 2025 to $35 billion at an oil price of $60 a barrel.

Shell said the expected shareholder returns are an increase on the period ending in 2020, where shareholder returns are anticipated at around $90 billion.

The company said it expects to raise its dividend when it is closer to completing the current $25 billion share-buyback program. Shell maintained its quarterly dividend in the first quarter of the year at 47 cents a share.

The company will invest an average of $30 billion in capital expenditure a year during the period, capped at $32 billion a year. This includes minor acquisition spend of up to $1 billion but excludes major inorganic opportunities.

Shell said it has re-focused its strategic themes into three categories--core upstream, leading transition and emerging power--to shape its portfolio and drive capital allocation.



Write to Oliver Griffin at [e-mail]; @OliGGriffin



(END) Dow Jones Newswires

June 04, 2019 02:39 ET (06:39 GMT)

[the grumpy old men] 04/6/2019 08:46

Shell Promises Significant Increase in Returns to Investors
By Kelly Gilblom
4 juin 2019 à 08:24 UTC+2 Updated on 4 juin 2019 à 09:29 UTC+2

Anglo-Dutch oil major to return $125 billion from 2021 to 2025
Company will examine new business models in power segment

Royal Dutch Shell Plc's Russian Oil Lubricants Blending Plant
Photographer: Andrey Rudakov/Bloomberg
SHARE THIS ARTICLE
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In this article
RDSA
ROYAL DUTCH SH-A
2,442.50
GBp
-30.00-1.21%
CL1
WTI Crude
53.31
USD/bbl.
+0.06+0.11%

Royal Dutch Shell Plc plans to shower its investors in money, pledging returns of $125 billion between 2021 and 2025 -- twice as much as a decade earlier.

The oil and gas major says it can pull off this feat with crude at $60 a barrel and only a small increase in capital spending, an aggressive move to keep shareholders on its side while it weathers a disruptive transition to lower-carbon energy. The Anglo-Dutch oil major has already sought to stand out from some of its peers, who are boosting spending to get more barrels of oil and gas.

Shell expects new projects to generate a torrent of cash -- as much as $35 billion a year by 2025 -- that it can use to enormously boost shareholder returns. Higher distributions could come in the form of both dividends and buybacks. It is now undergoing a $25 billion repurchase program set to end in 2020, and said it expects to increase the dividend per share “when there is line of sight to the completion” of the program.

“We have reshaped our company with a focus on value and have demonstrated a clear track record of delivering on our ambitious promises,” Chief Executive Officer Ben van Beurden said in a statement. “It is the success of our strategy and strength of our delivery today that gives us confidence for the future.”
New Themes
Shares fell 1.3% to 2,454.5 pence in London as of 8:27 a.m., in line with a broader decline in the European energy sector.

Shell didn’t break out how much of the $125 billion in distributions would come from higher dividends. That figure compares to $52 billion in payouts from 2011 to 2015, and an expected $90 billion from 2016 to 2020.

It raised its average capital investment estimate to $30 billion a year from 2021 to 2025, going no higher than $32 billion in the period. That's up from its current annual budget of $25 billion to $30 billion. That figure includes small acquisitions of less than $1 billion, but excludes “major inorganic opportunities.”;

Shell also offered a new way to think about the company, breaking out its strategy into three themes: Core Upstream, Leading Transition and Emerging Power.
Evolving Demands

The upstream segment includes deep-water, and shale and conventional oil and gas projects. Notably, Shell didn’t pledge a boost in hydrocarbon production, but instead said it would “sustain”; the business.

The transition theme incorporates the work of its integrated gas, chemicals and oil products businesses, while emerging power “will focus on creating business models to meet evolving customer demands.” Shell said previously it wants to be the world’s largest power producer by the 2030s, an ambition that’s raised questions from shareholders unsure about a business known for heavy regulations and low returns.

Shell said it intends to create new business models to achieve higher returns, without specifying what those could be. It said overall return on capital employed will be higher than 12% by 2025, up from about 9% at the end of the first quarter.
(Updates with CEO comment in fourth paragraph.)

[sogoesit] 04/6/2019 07:44

From Strategy Update today:
“Shell expects to increase the dividend per share when there is line of sight to the completion of the $25 billion share buyback programme.”

“Line of sight” meaning unknown albeit they state that current $25bn share buyback should complete “by end of next year” (i.e. 2020).

[waldron] 04/6/2019 06:56

European markets set for a negative open as global growth fears cap gains
Published 7 min ago
Alexandra Gibbs
@alexgibbsy




Key Points

After last Friday — when the U.S. President Donald Trump threatened to impose a 5 percent tariff on all Mexican imports — investors are awaiting further news surrounding trade tensions between the U.S. and other nations.
Trump and first lady Melania Trump will be continuing their state visit in Britain on Tuesday. Tensions surrounding his visit however, are expected to intensify as protests take place in London.

[10acious] 03/6/2019 17:53

Thanks for that fjg, nice informative appraisal.

[waldron] 03/6/2019 17:21

June 4, 2019 Management Day in London
June 5, 2019 Management Day in New York

[waldron] 03/6/2019 17:16

Brent Crude Oil NYMEX 61.81 -0.29%
Gasoline NYMEX 1.76 -0.73%
Natural Gas NYMEX 2.40 -2.40%
(WTI) 53.63 USD +1.53%


FTSE 100
7,184.8 +0.32%
Dow Jones
24,856.77 +0.17%
CAC 40
5,241.46 +0.65%
SBF 120
4,140.31 +0.53%
EuroStoxx 50
3,297.29 +0.52%
DAX Index
11,792.81 +0.56%
Ftse Mib
19,862.89 +0.31%



Eni
13.82 +1.77%

Total
46.71 +0.15%

Engie
12.515 +0.52%

Orange
14.15 +0.78%


Bp
544 +0.72%

Vodafone
129.96 +0.42%

Royal Dutch Shell
2,472.5 +0.47%


Royal Dutch Shell
2,487.5 +0.57%

[imperial3] 03/6/2019 17:04

Thanks figooner.

[fjgooner] 03/6/2019 16:05

Apologies for the formatting and the missing graphics, but this is the best that I can do right now.

----------------------------

UNDER THE BONNET We explain what this company does

How does Shell make its money and should you buy its shares?

We reveal where the FTSE 100 giant gets the cash to fund its mighty dividends

With a market cap of
more than £200bn
Anglo-Dutch oil major
Royal Dutch Shell (RDSB) is
comfortably the largest company
on the UK stock market. To put
its position into perspective, it
accounts for around 10% of the
FTSE 100 index on its own.
Given its heavyweight status
in London and the generous
stream of dividends it pays, there
is a good chances many of us
will have at least some exposure
to the stock either directly or
through an investment fund.
Bottom line: if you are a UK
investor, Shell really matters.
But how much do you know
about where and how Shell
makes its money? For all that it
has pledged to reduce its carbon
footprint, Shell still derives nearly
all of its revenue from fossil fuel related
activity. A structural shift
to renewable energy in many
parts of the world therefore
raises questions over the long term
sustainability of its dividend.
At the current share price of
£25.52 Shell is yielding 5.7%.

UNDERSTANDING THE DIFFERENT PARTS

Shell is an integrated energy
business. This means it has
operations in oil and gas
exploration, production,
marketing, refining,
transportation and distribution.

In a nutshell it is involved in
everything from drilling and
finding new sources of oil and gas
to selling you petrol at the pump.
This gives it almost unrivalled
insight into the energy market,
the downside being that its many
moving parts make it difficult to
value. For example, while higher
oil prices are generally good
news for Shell, they also have
a negative impact on margins
in its refining operations. The
situation is further complicated
by the fact the different parts of
Shell sell products and services to
each other.
In this article we will examine the separate components of
the business in more detail and
what they contribute in terms
of earnings. We will also discuss
Shell’s strategy and how this
underpins its long-term track
record of generous dividends.

INTEGRATED GAS AND NEW ENERGIES DIVISIONS

INTEGRATED GAS = 44.2% OF 2018 EARNINGS

INTEGRATED GAS – RECENT EARNINGS TREND

2016 $2.5bn
2017 $5.1bn
2018 $11.4bn

Shell’s main response to the
changing patterns in energy
consumption and growing
political pressure over climate
change has been to target
natural gas.
In a June 2015 speech Shell
chief executive Ben van Beurden
said of natural gas: ‘It is flexible.
Its supply is abundant and
diverse. Its range of uses is still
expanding. It is a low-carbon,
clean-burning ally to renewables
such as solar and wind. And it
makes economic sense.’
Expanding in this area was a
key rationale behind its £36bn
merger with BG in 2016. It
now has a leading footprint
in liquefied natural gas, which
involves cooling gas to a liquid
state so it can be shipped and
stored. It also includes the
conversion of natural gas to GTL
(gas-to-liquid) fuels.
This part of the business also
encompasses the New Energies
division. This is in effect the
‘green’ part of Shell and it has
plans to invest between $1bn
and $2bn a year out to 2020 in
areas like wind and solar power,
electric vehicle infrastructure
and biofuels.
This might sound like a
significant outlay, but it should
be seen in the context of overall
capital expenditure of between
$25bn and $30bn a year.

UPSTREAM DIVISION

Upstream includes exploration
and production of conventional
oil and gas, deep water
exploration and an increasing
contribution from shale – the
rock containing previously
untapped sources of oil and
gas which, in the past decade,
has been exploited through
improvements in technology.
The Upstream division also
encompasses the marketing
and transportation of crude oil
and natural gas as well as the
operation of infrastructure such
as pipelines which help deliver
these resources to market.
This part of the business is
most exposed to commodity
price volatility, reflected in the
recent earnings trend which,
as the chart shows, saw this
part of the business chalk up a
loss in 2018. [Note from FJ - this was an error by Shares Magazine - it should say "loss in 2016".]

UPSTREAM = 26.4% OF 2018 EARNINGS

UPSTREAM – RECENT EARNINGS TREND

2018 $6.8bn
2017 $1.5bn
2016 $-3.7bn

DOWNSTREAM DIVISION
The Downstream division
encompasses the refining of
the crude oil which comes out
of the ground to generate oil
products such as petrol, jet fuel
and heating oil. Globally the
company has 21 refineries with
the capacity to process a total of
2.8m barrels of crude oil per day.

DOWNSTREAM = 29.4% OF 2018 EARNINGS

DOWNSTREAM – RECENT EARNINGS TREND

2018 $7.6bn
2017 $8.3bn
2016 $6.6bn

It also markets refined
products like petrol and
lubricants with 44,000 Shell branded
petrol stations in more
than 75 countries.
In addition, the division
manufactures chemicals for a
range of industrial customers.
These products are used in
the manufacture of everything
from cars and detergents to
bike helmets.
It includes the oil sands
business, from which Shell
has increasingly retreated
of late.

HOW SHELL SEES THE DIFFERENT PARTS OF ITS BUSINESS

Shell puts its businesses in three
different categories.
• Cash engines – which as
their name suggests are
expected to provide reliable
cash flow to fund dividends
and to strengthen the
balance sheet.
• Growth priorities – areas in
which the company is investing
to create the cash engines of
the future.
• Emerging opportunities – areas
which could become growth
priorities once they have been
further developed and could
prove to be a substantial source
of future cash flow.

CASH ENGINES
Conventional oil and gas
Integrated gas
Oil products
Biotechnology

GROWTH PRIORITIES
Deep water
Chemicals

EMERGING OPPORTUNITIES
Shales
New energies

THE INVESTMENT CASE

Despite its big step out into the
natural gas market, Shell has not
really been a rapid growth story
in recent years.
An uptick in revenue and
earnings has been driven
by recovering commodity
markets and Shell has been
selling off assets to help reduce
borrowings built up amid the
oil price crash and through the
takeover of BG.
As investment bank Berenberg
observes: ‘Shell has an attractive
slate of assets starting up over
the coming years, including
profitable developments in
Brazil and further LNG projects.
Production is not growing
however, due to the substantial
divestment programme
under way to de-lever the
balance sheet.’
Shell nonetheless is very much
an income play for investors. It
has not cut its dividend since the
Second World War and its leaner
structure and more efficient
operations help underpin its
dividend credentials.
Unlike its rival BP (BP.), Shell
has not increased its dividend
despite the recent surge in
oil prices. It has been buying
back its own shares to help
compensate shareholders for
the scrip dividend, introduced
in early 2015, which allowed
investors to receive their
dividends in shares or cash.
Although this reduced
pressure on Shell’s balance
sheet, by increasing the number
of shares in issue it was also
dilutive to shareholders.
An investor day in June might
spell out plans for further capital
returns to investors.
A near 6%-yield is highly
attractive to investors and we
rate this as an excellent stock to
own, particularly if you rely on
income from your investments.
However, you do need to keep
a close eye on regulatory and
political developments as
climate change becomes more
of an issue.
Equally the world will not
wean itself off fossil fuels
overnight and there is reason to
believe the company can extend
its proud 70-plus year dividend
track record into the medium term
at least. We give Shell a
solid ‘buy’ rating.

By Tom Sieber
Deputy Editor

[adrian j boris] 03/6/2019 15:46

DOUBT WE CAN SEE UNLESS BUYING MAG

[imperial3] 03/6/2019 15:38

Could you please post that article,fjgooner.Thanks.