Shell Share Discussion Threads

[ariane] 04/2/2018 08:40

Shell faces struggle over €3bn Eneco deal


Shell’s step into Europe’s electricity sector has struck a stumbling block

Jillian Ambrose, Energy Editor

3 February 2018 • 8:00pm

Royal Dutch Shell has struck a stumbling block in its march into the European power sector over plans to pluck a Dutch utility from public ownership.

The Anglo-Dutch oil major is a front-runner in the €3bn (£2.64bn) race to snap up Eneco from the hands of 53 Dutch municipalities after the decision to privatise the green energy company.

The group already partners with Eneco on wind power projects in Europe, which could pave the way for its next step into the power market after buying UK energy supplier First Utility for a rumoured £200m.



But The Sunday Telegraph understands that Shell is facing internal divisions over the deal and mounting political opposition.

“The process has been stumbling on for a while but it’s like herding cats with all the stakeholders,” said one City source with knowledge of the deal.



Eneco’s shareholders have been forced to bring in a mediator to prevent the sale from descending into chaos as municipalities clash on whether to sell their stakes in the utility, and how to safeguard its green credentials.

Others rumoured to be in line for the sale include Finland’s Fortum, French energy giant Engie and private equity investor CVC. Shell declined to comment.

[abbotslynn] 03/2/2018 22:59

Still a buyer,thinking of the dividend.

[waldron] 02/2/2018 17:38

Shell A
2,395.5 -0.46%



Shell B
2,423.5 -0.37%

slinking in the 2375 to 2475p BOX awhile

strong usd not helping unless of course on divi calculating day

[grupo] 02/2/2018 15:26

The buy back plan at least $25 billion of shares from 2017 to 2020, subject to reducing debt further and a recovery in oil prices.

[montyhedge] 02/2/2018 13:57

Like I said whats the problem buybacks coming, underpins price, dividend safe. oil price going up, should be 2550p.

[grupo] 02/2/2018 12:01

Europe
Groningen production restrictions to prove costly for Dutch government, says WoodMac

Written by Allister Thomas - 02/02/2018 11:14 am

A rig from Shell's Groningen field
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Planned production cuts to the Europe’s largest gas field is to cost the Dutch state-run Enrgie Beheer Nederlands $5billion over the life of the field as well as cause the continent to look elsewhere for supply, according to analysts Wood Mackenzie.

There have been a series of powerful earthquakes in recent years around the Groningen field brought on by gas mining, with a tremor last month registering 3.4 magnitude – the most powerful to hit since 2012.

Yesterday the Staatstoezicht op de Mijnen (SoDM) mining association recommending the Ministry of Economic Affairs imposes an output cap of 12 billion cubic metres (bcm) annually over the next four years in the interests of safety.

The limit represents an annual cut of nearly half from the last cap of 21.6 bcm, and a drop of around 70% since the first cap was imposed in 2014.
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Groningen, which has been a terr represents a major global asset for operators Shell, ExxonMobil and Energie Beheer Nederlands.

It leaves questions over how the European market will deal with the 10bcm void, which equates to around 2%.

WoodMac believes the answer could lie in areas like Norway, Russia and imports from the global liquefied natural gas (LNG) market.

Jamie Thompson, an analyst with Wood Mackenzie’s North Sea upstream research team, said: “This could be significant for the partners in Groningen’s operating consortium, Nederlandse Aardolie Maatschappij (NAM), which includes Shell (30%), ExxonMobil (30%) and Dutch state participant Energie Beheer Nederlands (40%). Groningen has been a dependable source of cash flow for over 50 years for Shell and ExxonMobil, and ranks in both their top 10 assets globally by value.”

He added: “However, it is the effect on the Dutch state that will be felt most acutely. A cap of 12 bcm per year could diminish the remaining government take by over US$5 billion over the life of the field, and is further compounded by the remaining value Energie Beheer Nederlands stood to realise.”

[montyhedge] 02/2/2018 08:58

Buybacks coming, dividend safe, what's the problem, lol.

[la forge] 02/2/2018 08:34

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, 2018).

LONDON -- Royal Dutch Shell PLC more than tripled its profit in 2017 on a rebound in crude-oil prices, demonstrating how deep cost cuts are making energy companies almost as profitable as they were during the boom years of $100 a barrel.

The British-Dutch oil giant said Thursday its 2017 profit on a current cost-of-supplies basis -- a number similar to the net income that U.S. oil companies report -- was $12.1 billion, its highest level since oil prices slumped in 2014. The company said it generated about as much cash last year, when international oil prices averaged $54 a barrel, as it did in 2014, when they averaged $99 a barrel.

"We are able to do the same for less," Shell Chief Financial Officer Jessica Uhl said.

Investors were less impressed, reacting to a 21% drop in Shell's cash flow from operations in the fourth quarter compared with a year earlier. The company's share price fell around 2% Thursday, while big oil stocks were trading higher.

But Shell's results overall were another signal of financial confidence in an oil industry emerging from a long downturn as Brent crude, the international benchmark for oil prices, has hovered close to $70 a barrel. Exxon Mobil Corp. and Chevron Corp. are set to announce their earnings on Friday, and BP PLC on Tuesday, with all expected to show healthier profits.

The oil industry's return as a cash machine represents a shift that goes beyond buoyant crude prices and reflects success in companies' yearslong efforts to restructure. Energy companies that once struggled to generate a profit at $100 a barrel have cut costs to a level where they could cover their spending and dividend commitments at a price of $60 a barrel or lower.

Across the industry, companies have simplified project plans, slashed thousands of jobs and worked to boost production from existing assets. At Shell, the company says it has fundamentally revamped the way it designs and executes projects and is working to deliver another $9 billion to $10 billion of savings in the coming years.

Shell said it is on track to pay down its large debt load and commence a $25 billion share buyback program by the end of the decade. The company wouldn't reveal the program's timing, suggesting it wants to build financial strength further before it begins repurchasing stock, but said it viewed the matter with "a tremendous sense of urgency."

Shell has already removed a 2 1/2 -year-old program that had allowed shareholders the option to take a portion of their dividend in stock -- a popular choice among bullish investors but largely disliked because it diluted shareholder stock.

The results show how the company's $50 billion acquisition of natural-gas giant BG Group in 2016 is paying off, part of the company's bet on lower-carbon gas taking a lead role in efforts to tackle climate change. Profit in integrated gas doubled in 2017 to $5.1 billion.

Shell is also pushing ahead in early-stage investments in alternative energy such as electric-vehicle charging and offshore wind power, committing to spending $1 billion to $2 billion a year to the end of the decade.

The company has also moved to bolster its traditional oil-and-gas businesses. Shell recently announced a redevelopment project in the North Sea and on Tuesday was the biggest winner in a major auction for offshore oil blocs offshore Mexico.

Though the company said it remained committed to keeping a tight lid on spending, the moves demonstrate how the industry is beginning to look once more at the need to make long-term investments in future production -- a metric that received little attention while oil prices were plummeting.

Shell also said changes to the U.S. corporate tax rate could encourage further investment in the U.S., where the company already spends around $10 billion a year. Earlier this week, Exxon announced plans to spend $50 billion in the U.S. over the next five years, investments that were "enhanced" by the tax overhaul.

One worrisome note was Shell's cash flow, which fell to $7.3 billion in the fourth quarter from $9.2 billion a year earlier.

Investors have watched oil-company cash-flow numbers closely since oil prices crashed in 2014, using them as a sign of a company's financial toughness, and are still highly sensitive to any perceived weakness on this front. The amount of cash a company throws off from its operations is an important indicator of its ability to finance spending plans and dividends without having to take on debt.

Bank analysts had expected higher cash-flow figures from Shell, but high tax liabilities and cash calls related to the company's natural-gas hedging hampered the cash-flow performance in the fourth quarter.

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

February 02, 2018 02:47 ET (07:47 GMT)

[la forge] 02/2/2018 08:18

Shell can still grow in ‘rejuvenated’ North Sea, CEO says

Written by Mark Lammey - 02/02/2018 7:37 am

Shell CEO Ben van Beurden
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Shell’s boss said yesterday that the North Sea is showing signs of “rejuvenation” and can provide the oil major with more room to grow.

Doubts about Shell’s commitment to the UK were raised last year when it agreed to sell a package of assets to Chrysaor.

But last month the Anglo-Dutch energy giant announced its decision to invest in redeveloping the Penguins area, 150miles north-east of Shetland.

The project will involve the construction of Shell’s first new manned installation in the northern North Sea in almost 30 years.
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Chief executive Ben van Beurden said yesterday that the Penguins decision was “importantR21; for Shell.

He said: “Until then, our focus was on divesting and getting out of assets, which is a very important part of our strategy. But it was important to say that that is not all we want to do. We are still a leading North Sea producer.”

Speaking after the firm published its 2017 results, he said there would be “more to come” from Shell in terms of North Sea investment.

Shell is committing capital expenditure totalling £600-£900million to the basin over the next two to three years, Mr van Beurden said.

Development opportunities include the Fram field, 136miles east of Aberdeen. Shell submitted new plans for Fram in October and is targeting first gas in the second quarter of 2020.

However, Mr van Beurden said Shell still needed to “strengthen221; and get its debts down before considering any new mergers or acquisitions.

The company should be in a healthier position than this time last year, having disposed of £12.2billion worth of assets during 2017.

The sales form part of a £21billion-plus divestment programme aimed at balancing the books following Shell’s mega-merger with BG Group, which was completed in 2016.

Mr van Beurden said Shell was close to reaching its target for 2016-18, with disposals totalling £16.9billion already over the line.

Shell also reported a £5.6billion reduction in net debts.

Full-year revenues rocketed 31% to £215billion, while pre-tax profits increased by 223% to £12.8billion.

Shell attributed its strong showing to higher oil, gas and LNG prices and increased production from new fields.

Brent crude recently topped $71 per barrel for the first time since 2014 thanks to Opec-led output reductions and declining US stockpiles.

But Shell’s fourth quarter 2017 cash flow from operating activities was £5billion, down 20% compared to the same period in 2016, and below market expectations, according to Biraj Borkhataria, analyst at RBC Capital Markets.

Mr Borkhataria said: “Shell has had a good year overall and we don’t want to read too much into one set of numbers.”

[magicmayhem] 01/2/2018 19:31

I'm taking the view that the oil price will probably stabilise above $60. Which should mean a decent profit for shell. Bought a few more this morning (probably not the best timing). IMHO I think fair value is £29 share price So will buy more when the opportunity arises.

[septimus quaid] 01/2/2018 18:20

Post Carillon and Capita, the term "free cash flow" is everywhere.

[waldron] 01/2/2018 17:07

Shell A
2,406.5 -2.27%



Shell B
2,432.5 -2.54%

I must admit, the surprise for me today is the slip back into the 2375 to 2475p BOX

WHAT CAN I SAY

Perhaps a great buying opportunity


A substantial move into the 2575 to 2675p BOX still expected,THEN up further if no disappointments


Some are already pencilling in 2975p within 3 months


WHAT DISAPPOINTMENTS POSSIBLE

DUTCH QUAKE FINES

NIGERIA POLLUTION PENALTIES

ANY OTHER COSTS AND EXPENDITURES CONTROLLABLE OR IN THE HANDS OF THE GODS

[grupo guitarlumber] 01/2/2018 16:37

Royal Dutch Shell's Best Profit In Three Years Marred By Cash-Flow Drop
February 01, 2018, 08:33:43 AM EDT By BLOOMBERG NEWS, Investor's Business Daily

Shutterstock photo

The oil-price rally worked both ways for Royal Dutch Shell (RDSA) as improved exploration and production lifted profit to a three-year high while refining and trading fell short of expectations as margins shrank.

[ibd-display-video id=3012111 width=50 float=left autostart=true] Crude's surge raised adjusted profit at Europe's largest energy company to $4.3 billion last quarter, the highest since 2014. While the bottom line was better than expected -- and Shell is making as much money with oil at $60 a barrel as when it was $100 -- cash flow was the weakest since 2016.

"Unfortunately, resilient earnings do not appear to have translated into cash generation," RBC Capital Markets analyst Biraj Borkhataria said in a note. "This result leaves gearing falling by less than we expected" and could temper hopes of a share buyback program in the very near term, he said.

Oil majors including Shell have cleaned up their balance sheets to survive the worst industry downturn in a generation, eliminating expensive projects and laying off staff to cut capital expenditure. After those efforts and a recovery in oil prices , some analysts predict a bright 2017. Goldman Sachs Group Inc.'s Michele Della Vigna said it could be Big Oil's best year in decades, so long as companies maintain discipline.

Higher earnings and cash flow in 2017 are helping Chief Executive Officer Ben Van Beurden cut debt, which rose to a record of almost $78 billion following the acquisition of BG Group Plc. He can claim the company is headed in the right direction, but is still sitting on top of a massive $65 billion debt mountain, compared with just $24 billion at the end of 2014.
Refining Margins

"We have been able to pay down our debt quite a bit" after a very good year, Van Beurden said in a Bloomberg Television interview. "I'm very, very confident that we can indeed meet the commitments, the promises that we made, for the end of the decade, which is to have $25 to $30 billion free cash flow."

Exploration and production earnings of $1.65 billion beat analyst estimates provided by Shell. Refining and marketing profit of $1.4 billion was down both quarter-on-quarter and year-on-year, falling short of expectations.

Lower margins at the end of December and a smaller contribution from trading were partly responsible for the refining unit's declining earnings, Van Beurden told reporters in London. U.S. Gulf Coast margins dropped to an average $8.59 a barrel in the fourth quarter, compared with $13.04 in the preceding three months, according to Shell's documents. Rotterdam and Singapore showed similar proportional declines.

Van Beurden has said he wants to make Shell the best-performing oil major, surpassing Exxon Mobil ( XOM ). The Dutch company is the closest it's ever been to attaining the long-coveted prize of overtaking its American rival, at least based on market value.

Shell's 2017 profit was $16.18 billion, more than double the previous year. Exxon Mobil is expected to report annual earnings of $15.7 billion on Friday. That makes 2017 a "transformative year" for Shell, Van Beurden said.

Cash flow from operations was $7.28 billion, compared with $7.58 billion the preceding quarter and $9.17 billion a year ago. Fourth-quarter oil and gas output was 3.76 million barrels of oil equivalent a day, compared with 3.91 million a year earlier.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

[grupo guitarlumber] 01/2/2018 16:21

image:
Future Business
Shell results: profits don't tell the whole story
CEO Ben van Beurden is basking in the reflected glow of rising oil prices, but it's his refocusing of the company that deserves credit.
by Adam Gale
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Published: 3 hours ago
Last Updated: 48 minutes ago

The headlines about Shell’s 2017 full-year results were ever so rosy. Profits ‘jumped’, ‘surged’ or ‘doubled’, depending on who you asked. But earnings aren’t everything, and in this case, they’re not even the real story.

Of course commodity businesses make more money when their chosen commodity is dear: a barrel of finest Brent crude will currently set you back about $70, a far cry from the lows of $27 during the slump of 2015-16.

As the cost of getting the stuff out the ground stays the same, the top line price makes a pretty big difference. So yes, the full-year profit attributable to shareholders increased 183% to $13bn; while Q4 earnings, excluding identified items and on a constant cost of supply basis (i.e. the profit it would have made had oil and gas been at today's prices throughout the year), were up 140% to $4.3bn. Go figure.

Why the oil price has risen is an interesting story in itself*, but more interesting is how Shell has responded to the inevitable twists and turns of the market cycle.

CEO Ben van Beurden took the classic step of fixing the roof the when the rain was pouring. Figuring that the days of $100 oil were probably numbered, he’s attempted to focus the vast Shell machine on a) the activities it does best, such as deepwater exploration and extraction, and b) those activities that are less exposed to commodity swings, such as the burgeoning liquefied natural gas (LNG) market.

That’s what was behind Shell’s £35bn cash-and-shares acquisition of the LNG-heavy BG Group in 2016, and the otherwise counter-instinctive, simultaneous decision to shed $30bn in various ‘peripheral’ operations (it’s three-quarters of the way through, with the rest in progress) while imposing tighter cost discipline across the company.

So far, the latter decisions appear to have paid off: net debt has been reduced by $8bn (don’t get too excited – it still sits at $74bn) and underlying operating expenses dropped 2% despite oil volumes staying relatively flat. Cash flow – crucial to businesses big and small – reached a healthy $39bn, excluding working capital.

So while talk of surging profits may offer an inflated measure of van Beurden’s leadership because of the oil price rise, he still deserves credit because he’s strengthened the company’s fundamentals. Shell has earned the admiration of its peers – coming 8th in MT’s recent Britain’s Most Admired Company awards, which reflect the opinion of business leaders and independent analysts. It’s now trimmer and less exposed to the next cyclical oil price downturn, which will eventually, inevitably come when the frackers start drilling again. Then again, that’s harder to fit into a headline, isn’t it?

(*If you’re interested, the oil price fell because Chinese demand slowed and US frackers bumped up international supply. The recent recovery is due to a combination of the global economic uptick and the earlier impact of those low prices – deliberately exacerbated by OPEC keeping the taps on – throttling the frackers’ exploration pipelines. Isn't oil fun?)

Read more at

[enturner] 01/2/2018 15:39

Pleased with that long term. A chance to pick up a few more. :)

[grupo guitarlumber] 01/2/2018 15:34

By Sarah Kent

LONDON-- Royal Dutch Shell PLC more than tripled its profit in 2017 on a rebound in crude-oil prices, demonstrating how deep cost cuts are making energy companies almost as profitable as they were during the boom years of $100 a barrel.

The British-Dutch oil giant said Thursday its 2017 profit on a current cost-of-supplies basis--a number similar to the net income that U.S. oil companies report--was $12.1 billion, its highest level since oil prices slumped in 2014. The company said it generated about as much cash last year, when international oil prices averaged $54 a barrel, as it did in 2014, when they averaged $99 a barrel.

"We are able to do the same for less," Shell Chief Financial Officer Jessica Uhl said.

Investors were less impressed, reacting to a 21% drop in Shell's cash flow from operations in the fourth quarter compared with a year earlier. The company's share price fell around 2% Thursday, while big oil stocks were trading higher.

But Shell's results overall were another signal of financial confidence in an oil industry emerging from a long downturn as Brent crude, the international benchmark for oil prices, has hovered close to $70 a barrel. Exxon Mobil Corp. and Chevron Corp. are set to announce their earnings on Friday, and BP PLC on Tuesday, with all expected to show healthier profits.

The oil industry's return as a cash machine represents a shift that goes beyond buoyant crude prices and reflects success in companies' yearslong efforts to restructure. Energy companies that once struggled to generate a profit at $100 a barrel have cut costs to a level where they could cover their spending and dividend commitments at a price of $60 a barrel or lower.

Across the industry, companies have simplified project plans, slashed thousands of jobs and worked to boost production from existing assets. At Shell, the company says it has fundamentally revamped the way it designs and executes projects and is working to deliver another $9 billion to $10 billion of savings in the coming years.

Shell said it is on track to pay down its large debt load and commence a $25 billion share buyback program by the end of the decade. The company wouldn't reveal the program's timing, suggesting it wants to build financial strength further before it begins repurchasing stock, but said it viewed the matter with "a tremendous sense of urgency."

Shell has already removed a 2 1/2 -year-old program that had allowed shareholders the option to take a portion of their dividend in stock--a popular choice among bullish investors but largely disliked because it diluted shareholder stock.

The results show how the company's $50 billion acquisition of natural-gas giant BG Group in 2016 is paying off, part of the company's bet on lower-carbon gas taking a lead role in efforts to tackle climate change. Profit in integrated gas doubled in 2017 to $5.1 billion.

Shell is also pushing ahead in early-stage investments in alternative energy such as electric-vehicle charging and offshore wind power, committing to spending $1 billion to $2 billion a year to the end of the decade.

The company has also moved to bolster its traditional oil-and-gas businesses. Shell recently announced a redevelopment project in the North Sea and on Tuesday was the biggest winner in a major auction for offshore oil blocs offshore Mexico.

Though the company said it remained committed to keeping a tight lid on spending, the moves demonstrate how the industry is beginning to look once more at the need to make long-term investments in future production--a metric that received little attention while oil prices were plummeting.

Shell also said changes to the U.S. corporate tax rate could encourage further investment in the U.S., where the company already spends around $10 billion a year. Earlier this week, Exxon announced plans to spend $50 billion in the U.S. over the next five years, investments that were "enhanced" by the tax overhaul.

One worrisome note was Shell's cash flow, which fell to $7.3 billion in the fourth quarter from $9.2 billion a year earlier.

Investors have watched oil-company cash-flow numbers closely since oil prices crashed in 2014, using them as a sign of a company's financial toughness, and are still highly sensitive to any perceived weakness on this front. The amount of cash a company throws off from its operations is an important indicator of its ability to finance spending plans and dividends without having to take on debt.

Bank analysts had expected higher cash-flow figures from Shell, but high tax liabilities and cash calls related to the company's natural-gas hedging hampered the cash-flow performance in the fourth quarter.

Write to Sarah Kent at [e-mail]



(END) Dow Jones Newswires

February 01, 2018 10:02 ET (15:02 GMT)

[rick138] 01/2/2018 12:51

Still work to do: from memory, ROACE was 5.8%, compared with 12-14% for several years before the oil price slump. Net debt needs to come down. Slight weakening of cash flow this quarter. Slightly cautious approach (e.g.holding of the dividend) no surprise.

[fjgooner] 01/2/2018 12:41

Great results as expected, today's share price is an irrelevant blip on the way to sensible prices later in the year above £28.

2018Q1 is looking to be the first really huge beneficiary of the move up in crude prices - 2017 Full Year was recorded against an average Brent price of $54, currently we're tracking $69 for 2018 average.

Goldman Sachs also turned bullish on oil today citing a cyclical upgrade and revising its 6 month Brent forecast to $82.50 and forecast 2018 demand growth of 1.86mb/d.

Looking forward to the webcast live this afternoon at 2pm UK time.