Shell Share Discussion Threads

[costax1654x] 04/7/2018 17:04

Drilling technologyA test of its DT Ultravert technology at a parent well in the US's Permian basin was completed successfully in February.The technology has shown it can restore reservoir pressure in both horizontal and vertical wells used in the 'fracking' process.The process involves the injection of nitrogen gas into an existing well at the same time as a new nearby well is fracked.It is designed to prevent the older well from being damaged (known as bashing) by the new one.HNR holds 75% ownership in patents of the DT Ultravert technology, which has a net present value (NPV10) potential of between US$78mln to US$135mln subject to further testing and commercialisation.According to Highlands chief executive Robert Price, the testing of DT Ultravert in the Permian basin, which he described as "the most important shale play in the United States today", will catch the attention of the company's peers in the industry.Production milestones surpassed in East DenverThe company isn't just in the business of commercialising well technology, it also produces from its own operations.In April, HNR said it had secured a natural gas sales deal for its East Denver Niobrara project in Colorado.The project, as of the period ended March 31, has generated net revenue of US$3.8mln, with production figures placing it within the top 3% of all Niobara wells in Colorado.The Wildhorse and Powell wells, located within the East Denver project, surpassed a milestone of 100,000 barrels of oil equivalent in 64 days following initial production in December 2017.HNR has also received permission to increase the number of wells at the project up to eight.The project can also count on a US$58.5mln commitment from a US oil and gas focused private equity group to support an expansion of up to 24 wells at the site.According to HNR, the East Denver project has an NPV10 range for six wells of between US$23.3mln to US$30.1mln.An estimate for the full 24 wells sees this estimate increase to between US$96.6mln to US$124.5mln.To put that into context, Highlands' market cap stands at £26.9mln at 21.1p.Gas and helium potential in MontanaHNR also has its own gas operation in the form of the Helios Two project in Montana.While still in production testing, an update on 1 February revealed that gas production rates had "intermittently peaked" at up to 216,000 cubic feet per day of gas.A 2017 assessment provided an NPV of the project of up to US$341mln across a 69,120-acre area.At a recent federal auction, HNR acquired an additional 116,488 acres of the project area, expanding its footprint to 221,973 acres.In addition to the gas reserves, helium has also been discovered at the project with a content of 0.36%, similar to the Hugoton gas field in Kansas.If developed, HNR expects the helium resource to provide a strong upside to the NPV of Helios Two.A US$8.5mln programme is expected to advance development of the project which could see up to 24 wells in place.

[costax1654x] 04/7/2018 13:44

HNR is a small mcap,producer,without debts,with a third party paying for drilling,and 2 wells producing....no dilution,and cash in bank....worth a look!!

[the grumpy old men] 04/7/2018 13:00

STRANGE ADVFN HICCUP

GRAPHS FLATLINING

[fjgooner] 04/7/2018 12:44

Agreed. That piece in the Express is without doubt the most moronic thing I've ever read on this sector.

Even just on a numerical basis it is completely absurd - something rocketing to just over 75 before plummeting "precipitously" to just under 73 and settling at just under 74. Really?

That's so ludicrous I can hardly put into words.

One word will suffice: stoooopid.

And as for the comments section that follows - I rarely get a view of how thick and gullible readers of the gutter press are. And these people presumably have the right to vote in elections. Truly disturbing.

[awise355] 03/7/2018 23:00

That's some shocking journalism there...and not just because I'm long oil stocks..

[xxxxxy] 03/7/2018 22:04

Everything about the wheels and mechanics and food ... depends on this stuff. Modern civilisation grows in this stuff.

[waldron] 03/7/2018 20:23

Total
52.73 +0.90%

Engie
13.37 +1.67%

Orange
14.41 +1.16%

FTSE 100
7,593.29 +0.60%
Dow Jones
24,174.82 -0.54%
CAC 40
5,316.77 +0.76%


Brent Crude Oil NYMEX 77.62 +0.28%
Gasoline NYMEX 2.11 +0.25%
Natural Gas NYMEX 2.86 -0.03%



BP
581.4 +1.43%

Shell A
2,610.5 +0.54%

Shell B
2,689 +0.60%

[aversion] 03/7/2018 12:18

Possible upside break coming?

[fjgooner] 03/7/2018 12:13

Not much new in this article, but a good summary of where Shell sits today.

FJ

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



Royal Dutch Shell: Streamlining Assets

Jun. 30, 2018 12:54 AM ET
By Tudor Invest Holdings

Summary


•Renewal of assets with great focus on the future.

•Natural gas as energy source will continue to grow.

•Share buybacks and generous dividends.

Background

Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) has been actively focusing on what kind of business it wants to be involved in. Part of this activity is to change the composition of its assets. It has been selling plants and oil licenses, and invested where it wants to position the company.

Disposals have also been done to reduce the total debt level. Much of the debt came from the $35 billion acquisition of BG Group back in March of 2016.

Disposals

Early this year, Shell communicated that its plans were to leave oil and gas operations in as many as 10 countries and instead focus more heavily on gas-rich Australia and shale opportunities in the United States.

“
This streamlining of our portfolio is part of our ongoing effort to raise efficiency through reduced costs and concentrating on our most competitive businesses. - CEO Ben van Beurden

The company had earmarked $30 billion as its divestment target for 2016 to 2018, and has made good progress so far.

Divestments included oil sands interests in Alberta, Canada, in line with what other oil majors such as Exxon Mobil (NYSE:XOM) and Equinor (NYSE:EQNR) had done. In effect, the company reduced its stake from 60% to 10% and gained $7.25 billion in the process. The environmental impact of extracting oil from bitumen/tar sand is challenging to say the least and must have been one of the main reasons why it exited this business.

Onshore upstream operations in Gabon were sold for $628 million. The buyer was Assala Energy Holdings Ltd., which is a portfolio company of The Carlyle Group (NASDAQ:CG). These oil fields were quite mature. Shell's production in Gabon was around 55,000 barrel per day of oil equivalent. Production reached a peak of 365,000 barrel per day in 1996 and had steadily declined thereafter. To top it up, the country also suffers from political unrest. Not something very conducive for further investments.

Shell also sold a number of assets in the UK North Sea in 2017. These are also mature assets and therefore not considered a high priority going forward. Last week, it was also reported that Shell sold off part of its two oilfields in the NCS (Norwegian Continental Shelf). Those two fields produce 22,000 barrels of oil per day. The buyer of these two fields is a small Norwegian oil exploration company called OKEA. The price for the stake was $556 million.

Last year, the company also sold its remaining shares in Woodside Petroleum in Australia. Originally, Shell had held 40% of this major Australian LNG exporter, but over the years, it had been reduced. This last sale gave proceeds of $479 million.

Shell has had several joint ventures with Saudi Aramco. One of them was the Motiva joint venture in the United States. This was on the request from Saudi Aramco, as it is preparing for its IPO. Other divestments in Saudi Arabia included Shell's interest in a petrochemical joint venture.

Shell is currently in discussions to sell its remaining interests in New Zealand. These interests include the Maui (83.75%) and Pohokura (48%) natural gas fields. It is also an operator with an approximate 61% interest in an exploration license in the Great South Basin. The business is under strategic review. During 2017, Shell already sold its 50% interest in the Kapuni gas field in New Zealand.

A refinery in Fredericia, Denmark, with a capacity to handle 70,000 barrels of product per day, has been on the chopping block for quite some time. Negotiations stalled last year, as it was reported that the company had been offered only $80 million for the plant.


Recently, Shell handed over all its operation at the Majnoon oil field in Iraq. It was producing 235,000 barrels of oil per day.

Shell is on schedule to execute divestments at an average rate of more than $5 billion a year until at least 2020.

Investing and Growing

Shell's growth priorities currently are deepwater in upstream, and chemicals in downstream. Capital investment in 2017 was $24 billion.

The largest deepwater resources are held in the U.S. Gulf of Mexico and in Brazil.

In January this year, Shell announced the largest discovery in the U.S. Gulf of Mexico over the last decade. It is located at the Whale deepwater well, where it encountered more than 1,400 ft. of oil-bearing pay. In April, the company gave the green light to start the Vito project in the Gulf of Mexico. It is expected to be completed and start operation by 2021. Shell estimates that the cost of developing this field has been reduced by 70% from its original price, and claims that its break-even price is as low as $35 per barrel. It has a proven reserve of 300 million barrels.

U.S. shale production is one of the areas of growth for Shell in the next decade. However, most of the current output from the shale is natural gas, where profit margins are lower, so the majority of its budget for at least the next two years is earmarked for new oil resources. These are particularly in the Permian basin. Shell has earmarked $2 to $3 billion a year for shale until 2020, which is roughly 10% of its total planned yearly capital spending. The company aims to raise its total shale production by 200,000 BOE/day to 500,000 BOE/day by 2020.

In Brazil, the offshore oil production comes from up to 15 Floating Production Storage Offloading, "FPSO," tankers anchored off the coast in deepwater. Last year Shell won three 35-year production sharing contracts for pre-salt blocks located in the Santos basin. These are important as they hold large quantity of oil in these reservoirs.

On a smaller scale, in 2016, Shell created a new business unit called "New Energies". Last year this unit acquired NewMotion, one of Europe's largest electric vehicle charging providers. At the end of the year, the company also agreed to buy First Utility, a household energy provider in the UK. It has estimated that the capital investment in New Energies to be between $1 billion and $2 billion a year from this year until 2020.


In January 2018, Shell also bought a 43.83% interest in Silicon Ranch Corporation, a leading US developer, owner, and operator of solar assets.

More Liquefied Natural Gas

The immediate future of energy generation is presently gas. Coal will be replaced with gas. The most economical way to transport gas over long distances is through LNG. I have written several articles here on SA about how you can invest in this sector. The latest article was Dynagas LNG Partners: Update Of Current Events. Other similar companies are Golar LNG (GLNG), Teekay LNG Partners (TGP) and GasLog Partners (GLOP). These 3 companies have formed a pool where they pool their resources to achieve a better economy of scale and better utilization of their ships.

In 2017, the global LNG market grew by 29 million tonnes, which was an increase of 11.2% year on year. Long-term contracted LNG prices in the Asia-Pacific region generally increased in 2017. Looking ahead, Shell expects gas markets in North America, Europe, and Asia Pacific to be well supplied over the next few years, despite the expectation of demand growth in the Middle East and Asia.

Shell is very focused on LNG. It has built a floating liquefied natural gas (FLNG) facility called "Prelude", which is the largest ship in the world. It safely arrived at the coast of Western Australia back in September last year. This is a significant engineering achievement, and I would encourage you to check out a YouTube video to get an understanding of the complexity of this project. Earlier this month, "Prelude" FLNG received LNG from Shell's own LNG carrier "Gallina" as part of the cooling process before start-up.

The Prelude FLNG is now testing its systems in preparation for first gas from Shell's Prelude field, which holds ~3 trillion cubic feet of natural gas, in combination with the adjacent Concerto field. Shell expects to begin generating revenue from the multi-billion-dollar project sometime this year.


In Canada, the joint venture is also evaluating an investment in an LNG export facility in Kitimat on the west coast of Canada. Bearing in mind that large volumes of LNG are exported to Asia, this location would mean shorter sea voyages compared to those coming from the U.S. east coast and the U.S gulf area.

A takeaway from 2017 Annual Report

The company distributed $15.6 billion to shareholders in the form of dividends in 2017, including the scrip shares.

Shell CEO Ben van Beurden said the company has raised its outlook for annual free cash flow to between $30 billion and $35 billion by 2020 at a Brent crude oil price of $60 a barrel. This is $5 billion more than the outlook range we gave in June 2016. This includes the impact of acquisitions and proceeds from divestments while excluding free cash flow from assets after planned divestments.

It has confirmed its intention to undertake a share buyback program of at least $25 billion between the years of 2017 and 2020.

Debt reduction remains a priority, and after this program is completed, Shell expects to continue divestments at an average rate of more than $5 billion a year until at least 2020.

Proven oil and gas reserves (in million barrel oil equivalents) have been falling, as can be seen from the following graph:

Source: Shell Annual Report/Graph TIH

Taking into account Shell's production of 1,206 million BOE, of which 38 million BOE was consumed in operations, its reserves actually decreased by 863 million BOE last year. That is why large discoveries are important going forward.

With regard to cost control, Shell, like other oil majors, has squeezed out as much as it can from operating expenses. From 2014, when Brent crude fell to $40, this was absolutely necessary. This cost-cutting exercise was felt by all its suppliers and contractors, of whom one of our companies is one.


Shell's approach is that oil and gas prices may stay low forever. This has, according to it, embedded a disciplined cost management, with an outlook of spending less than $38 billion a year on operating expenses, based on the assets it has in operation and planned to come online.

Conclusion

The company is not only generously distributing profits, but it is also investing heavily for the future.

Shell is now a more competitive and a more focused company than it was in the past. At a price north of $70 for the B Class shares, it is no longer cheap.

But as the Oracle of Omaha Warren Buffett once said:

“It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

The world's population and economies are growing. With it, the demand for energy will also grow. Royal Dutch Shell is in an excellent position to deliver this energy in the future and make a handsome profit doing so. Furthermore, and most importantly, it has a proven track record of sharing the profit with all its shareholders.

[waldron] 02/7/2018 17:25

Total
52.258 +0.09%

Engie
13.15 +0.15%

Orange
14.245 -0.70%

FTSE 100
7,547.85 -1.17%
Dow Jones
24,152.86 -0.49%
CAC 40
5,276.76 -0.88%


Brent Crude Oil NYMEX 77.85 -1.75%
Gasoline NYMEX 2.11 -1.93%
Natural Gas NYMEX 2.86 -2.12%

BP
573.2 -0.88%

Shell A
2,596.5 -1.24%


Shell B
2,673 -1.49%

[waldron] 29/6/2018 17:56

Total
52.21 +0.08%

Engie
13.13 -0.04%

Orange
14.345 +0.24%


FTSE 100
7,636.93 +0.28%
Dow Jones
24,468.61 +1.04%
CAC 40
5,323.53 +0.91%


Brent Crude Oil NYMEX 78.99 +2.05%
Gasoline NYMEX 2.15 +2.06%
Natural Gas NYMEX 2.92 -1.08%


BP
578.3 -0.72%

Shell A
2,629 -0.70%


Shell B
2,713.5 -0.55%

[fjgooner] 29/6/2018 11:18

Brent is currently at $78.90.

Brent Oil Technical Levels that I noted down a few days ago:

Resistance: $75.70 (50-day moving average), $77.80 (June 1 high), $80.49 (May high).

This is looking really strong, having blasted through both the 50-day moving average and the June 1 high.

Brent Oil average for the quarter 2018Q2 with one day to go is running at 74.96.

By far the highest since 2014 Q4:

2014 Q4 $75.957
2015 Q1 $54.046
2015 Q2 $62.099
2015 Q3 $50.031
2015 Q4 $43.421
2016 Q1 $34.357
2016 Q2 $45.953

.........

I'm massively looking forward to reading Shell's 2018Q2 results on July 26th.

And it's another beautiful, sunny weekend to enjoy.

FJ :)

[sogoesit] 28/6/2018 18:15

From my charting perspective I think we're setting ourselves up for a move upwards.
I don't think cable's retrace has been factored in either so maybe that could be a reason.
Looking for the 3000 marker next based on continued retrace of cable.

[waldron] 28/6/2018 17:46

Total
52.17 -0.61%

Engie
13.135 -1.02%

Orange
14.31 -1.00%

FTSE 100
7,615.63 -0.08%
Dow Jones
24,121.25 +0.02%
CAC 40
5,275.64 -0.97%


Brent Crude Oil NYMEX 77.39 +0.26%
Gasoline NYMEX 2.10 +0.15%
Natural Gas NYMEX 2.97 -0.60%

BP
582.5 +0.03%

Shell A
2,647.5 +0.27%

Shell B
2,728.5 -0.02%

[waldron] 27/6/2018 17:39

Total
52.49 +1.96%

Engie
13.27 +1.34%

Orange
14.455 +0.91%

FTSE 100
7,621.69 +1.11%
Dow Jones
24,463.51 +0.74%
CAC 40
5,327.2 +0.87%


Brent Crude Oil NYMEX 77.80 +1.82%
Gasoline NYMEX 2.11 +2.33%
Natural Gas NYMEX 2.97 +0.75%


BP
582.3 +3.35%


Shell A
2,640.5 +2.58%


Shell B
2,729 +2.81%

[imperial3] 27/6/2018 15:56

I trust Mr.Woodford is suitably impressed by the share price performance.