Shell Share Discussion Threads

[waldron] 07/5/2019 17:14

BP
533.2 -2.72%

Vodafone
140 -0.04%

Shell A
2,375 -3.24%

GlaxoSmithKline
1,517.8 -2.22%

Rio Tinto
4,410 +0.06%

Shell B
2,376.5 -3.88%


STRANGE DAY BUT STILL IN THE 2375 to 2475p BOX

[montyhedge] 07/5/2019 16:19

spud
Yes sold get than back cheaper, easy really.

[spud] 07/5/2019 16:00

You hope....spud

[montyhedge] 07/5/2019 15:54

2275p here we come again.

[montyhedge] 07/5/2019 15:40

Timmmmmmber.

[lippy4] 07/5/2019 15:06

fjgooner thanks for the post 5815.

[shiv1986] 07/5/2019 14:37

ADVFN is hosting an investor event for Avation plc, on the 21st May to find out about their future prospects.

Sign up to attend this event in order to meet the Finance Director of Avation plc along with the ADVFN team:

[spud] 07/5/2019 14:17

Shell is at the forefront of diversification into alternative sources of energy, far ahead of its similar peers. For me that's a great incentive to remain invested. Oh and the gilt edged divi as well!spud

[fjgooner] 07/5/2019 13:47

Yawn. Muppet.

[montyhedge] 07/5/2019 13:18

Read a great analyst report on oil. Saying is this the last hurah for oil companies, 10 to 15 years where will they be. Decline is coming.

[fjgooner] 07/5/2019 11:43

And for those who didn't hear it live or read it, here is the full Q1 2019 Earnings Call Transcript.

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

Royal Dutch Shell PLC (RDS-B) Q1 2019 Earnings Call Transcript

RDS-B earnings call for the period ending March 31, 2019.

Prepared Remarks:

Jessica Uhl -- Chief Financial Officer

Thank you. Ladies and gentlemen, good afternoon and welcome to Shell's First Quarter 2019 Results Call. Before we start, let me pause on the disclaimer statement.

Shell delivered another strong set of results in the first quarter of 2019. Building on the successes of 2018, in Q1 2019 we generated cash flow from operations excluding working capital movements of $12.1 billion and CCS earnings of $5.3 billion . These results show the combined strength of our strategy, portfolio, and operational performance. We have reshaped Shell to deliver higher returns across our Upstream, Integrated Gas and Downstream businesses. Today, I will present our Q1 results and then talk about portfolio highlights, before providing more insight into our earnings and cash flow, including the impact of the new IFRS 16 accounting standard. As I go through the results, please keep in mind, they are presented on a post-IFRS 16 basis.

For Shell to deliver a world-class investment case, we need to generate leading, growing and resilient cash flows and returns, and be disciplined with our cash allocation. In the first quarter, we did just that. Cash flow from operations, excluding working capital movements, were $12.1 billion , once again the highest in our sector. This was at an average Brent price of $63 per barrel. Our organic free cash flow for the quarter was $3.4 billion . This includes a working capital impact of some $3.5 billion .

CCS earnings, excluding identified items, amounted to $5.3 billion , and ROACE reached 8.4%. We are continuing to demonstrate progress toward ROACE of 10% by the end of 2020, even with the headwinds associated with IFRS 16. For Q1 2019, our gearing is 26.5% post-IFRS 16, or 21.9% on an IAS 17 basis, in line with the expected change. I will talk through this further later in the presentation.

Our capital investment in the quarter was $6.7 billion . Our share buyback program is progressing with some $6.75 billion in shares purchased in the last seven months. And the next tranche of up to $2.75 billion begins today. The share buyback program is executed under irrevocable contracts of approximately three months with a bank. The contracts allow for some flexibility with respect to the total value of shares purchased and the time period over which they are purchased, in order to achieve the best commercial terms. Once the contract has commenced, we do not have the ability to alter the phasing or amount of shares purchased. We continue to believe in our ability to complete $25 billion in share buybacks by the end of 2020, subject to further progress on debt reduction and oil price conditions.

In summary, a good quarter, with very competitive performance from our Upstream, Integrated Gas and Downstream businesses. This competitive performance can be seen when we look at our cash flow generation and returns on a four quarter rolling basis. To deliver on our world-class investment case ambition, we have reshaped Shell. Our leading cash generation and returns position reflects the strategic and portfolio choices we have made. And our focus on operational excellence, integration and our brand has made the most of these choices.

We are committed to maintaining our leading position in each of these metrics, to continue delivering competitive returns and cash flow from operations. And, while it's a priority for us to deliver our results, how we run our business is also key to our strategy. To sustainably deliver the world-class investment case, Shell has to be known as a company that performs and behaves in the right way to achieve its strategic ambitions.

Maintaining a strong societal licence to operate is a key pillar of our strategy. For us to do this, we need to demonstrate commitment to three core elements. Firstly, no harm. No harm to people and no harm to the environment. The second element is to have good products. We need to make and sell products that our customers want and need, and we must be good product stewards. The third, and final, element, is to contribute to society in order to be a valued part of society. This means supplying energy, providing employments, bringing investment and prosperity with our projects, and more.

How we conduct our business needs to reflect our values and principles, with Shell seeking to contribute positively to key issues, such as transparency, ethics and compliance, worker welfare, and diversity and inclusion, among others. As an example, we recently issued a report that provides transparency on climate-related positions of trade associations and the basis for our participation in these associations. This is one of the steps we are taking to increase transparency and ensure alignment with our positions on key matters. We believe by demonstrating commitment to these core elements, no harm, good products, and being a trusted company, we build and maintain trust, underpinning a strong societal licence to operate.

Let us now go through some of our portfolio highlights. In February, we announced the start of production at the Lula North deep-water field in Brazil. Production from Lula North is processed by the P-67 floating production and storage offloading vessel, and this is in addition to the P-69 FPSO, which started up in the fourth quarter of 2018. Both facilities are ramping up toward peak production, and we expect another FPSO to come on stream in 2019. This reinforces our position as a major producer of oil and gas in Brazil, with total equity production this quarter of some 375,000 barrels of oil equivalent per day -- the largest in the sector behind Petrobras.

Now, moving to the Gulf of Mexico, another heartland for our Deep water business. We continue to make investments in both exploration and new projects to sustain this business for decades to come. Supporting this future growth, Shell announced a significant discovery at the Blacktip prospect in the Deep water US Gulf of Mexico. The Blacktip exploration well has encountered more than 400 feet, or 122 meters, of net oil pay. Evaluation is ongoing to further delineate the discovery and define development options. Shell also announced the divestment of the Caesar Tonga asset for a total consideration of $965 million. This transaction reflects continued portfolio optimization, focusing on assets where we see the most value in the longer term.

We have also announced the divestment of a number of other assets, for example, our refinery in Saudi Arabia, and the interest in the Greater Sunrise fields. The total of these announced divestments to date amounts to some $2 billion . Another project that reached a key milestone is Prelude. In the fourth quarter of 2018, we announced that we opened wells to supply gas to this facility. We have produced the first condensate cargo, and we expect to ship our first cargo of LNG in Q2 this year.

As you can see, the Upstream and Integrated Gas businesses achieved important milestones in the first quarter. The same holds true for Downstream. In our retail business, for example, we made important progress on our strategy, building on our position in existing markets, and increasing our presence in five growth markets; China, India, Mexico, Indonesia, and Russia. Progress is gathering pace and we are pleased to report that some 250 sites were opened in these growth markets across the last two quarters. But to achieve our Downstream growth ambitions, we also need to enhance our existing market positions, and China is a great example of this. We have seen growing demand for our premium fuel, V-Power, which is now being offered at over 900 service stations in China, and we expect further demand for these types of products, allowing us to achieve greater margins.

Another example of Shell offering new solutions to our customers is our nature-based solutions offering, where we are making it possible for our customers to drive carbon-neutral. Starting in April, Shell customers in the Netherlands can use nature-based carbon credits to compensate for the carbon associated with the use of fuels purchased from us. This is done at no extra cost for customers who choose Shell V-Power, while those who fill up with regular Shell fuels can participate for an additional $0.01 per liter. We plan to make similar opportunities available to customers in other countries, starting with the UK later this year.

We are further enhancing the customer experience with additional products and services. With the Shell App, we can provide customers with multiple flexible solutions to meet their needs as part of our loyalty proposition. In the UK, for example, with the recent rebranding of First Utility to Shell Energy, we can now use our Shell Go+ loyalty program, to provide Shell Energy customers an integrated set of offers at the service station, and in their homes.

To further meet the needs of customers, while enabling a lower carbon future, Shell Energy will now supply all of its household customers with electricity that comes from 100% renewable sources like wind, solar and biomass. A recent survey indicated that 60% of British households want to power their homes with renewable electricity, so this is about knowing our customers and providing low carbon solutions, today.

So, as you can see, we are building on the solid foundations of our retail business to further innovate and grow. We are taking these steps to build a competitive and sustainable business with attractive and resilient returns, and with opportunities to scale-up once proven. So, in Q1, we saw new Upstream and Integrated Gas projects starting up, we saw Downstream reaching new customers, and existing customers in new ways, and we saw New Energies growing. We continue to invest in our portfolio to drive our strategy, market leadership and competitive returns. This is also reflected in how we are further high-grading our refining portfolio.

In April, Shell announced the sale of its 50% interest in the SASREF refining joint venture to its partner, Saudi Aramco, for some $630 million, and we are expecting the transaction to complete later this year, subject to customary closing conditions. This sale is aligned with our strategy of consolidating our footprint to focus on increasingly complex sites, which offer greater flexibility, proximity to customers, and integration with Shell's trading network.

The focus on high-grading our portfolio has improved our competitive position. And by continually optimizing the core assets, we will further improve the competitiveness of these assets. In Bukom, for example, we have installed two crude oil tanks at the refinery. Once the final permits are approved, this will increase the site's total storage by around 1.3 million barrels of crude oil. This strengthens Bukom's flexibility and enables supply and distribution optimization, to secure the best value crude for the refinery. Again, another example of how Shell ensures it is optimizing its operations, unlocking the best value from the integrated value chain.

This also provides further opportunity as we implement the new marine fuel specification, aligned with the International Maritime Organization, IMO, 2020 targets. And, this project did not follow conventional construction practices, but instead used novel automated welding technology to help accelerate construction, another example of how we are doing more for less, and using technology to our advantage.

And finally, we are using technology to further help us improve the safety of our people, and support our continued drive for operating cost efficiencies. These new tanks feature an automated cleaning system that will help improve the long-term integrity of the tanks and, importantly, reduces the need for employees to manually perform this task going forward. This is safer and costs less.

Enhancing our refinery storage capacity, and optimizing our blending capabilities is a key part of how we unlock value from our integrated Refining and Trading and Supply businesses.

Last year, we installed two new crude oil storage tanks with mixing capabilities at our Deer Park refinery on the US Gulf Coast. And we are also investing in additional storage capacity at our Scotford refinery in Canada and Geismar Chemical plant in Louisiana. Both of these projects will use best practices and learnings from Bukom. In summary, these are great examples of how we have looked to optimize assets at every step through construction to operations.

Now, we have seen some of the elements Shell has delivered across its portfolio, let me turn to our financials. On a post-IFRS 16 basis, our Q1 2019 CCS earnings, excluding identified items, amounted to $5.3 billion , which is 2% lower than in Q1 2018. In our Integrated Gas business, total production was 12% lower compared with the first quarter 2018, mainly due to divestments and the transfer of the Salym asset into the Upstream segment.

LNG liquefaction volumes decreased by 2% compared with the first quarter 2018, mainly driven by higher maintenance activities and divestments, partly offset by increased feedgas availability. Integrated Gas earnings, excluding identified items, were $2.6 billion , or 5% higher than in the same quarter last year, largely driven by higher realized LNG and gas prices and increased contributions from LNG portfolio optimization, partly offset by the impact of lower production and LNG sales volumes.

Earnings excluding identified items in Upstream were approximately $1.7 billion , or some $170 million higher than in Q1 2018. This was driven by higher volumes, mainly from the US Gulf of Mexico and shales operations, and reduced operating expenses. This more than offsets the impact of higher tax charges and lower realized oil prices. First quarter Upstream production increased by 1%, compared with the same quarter a year ago, mainly due to higher production from our North American assets, and the transfer of the Salym asset from the Integrated Gas segment. This was partly offset by the impact of divestments, field decline and lower production in the NAM joint venture. Excluding these portfolio impacts, production was up 2% over the same period.

In Downstream, CCS earnings excluding identified items in Q1 2019 were $1.8 billion . Downstream benefited from higher contributions from crude oil and oil products trading, partly offset by lower refining, intermediates and base chemicals margins.

In Corporate, we have seen the additional impact of IFRS 16 with the interest recognition residing in the segment. This is consistent with the expected impact as a result of IFRS 16, as previously communicated.

Now let us review the cash flow. Our Q1 2019 cash flow from operations, excluding working capital movements, amounted to $12.1 billion , which is $1.8 billion higher than in Q1 2018. This is against a backdrop of lower chemicals and refining margins and decreased realized oil prices, and also includes the IFRS 16 impact on cash flow, as previously communicated in our call, of around $950 million.

In our Integrated Gas business, cash flow from operations in Q1 2019 was $4.2 billion , and includes positive working capital movements in the quarter. In our Upstream business, our cash flow from operations was $1.7 billion higher, and includes a help from working capital, in addition to the increased volumes in the quarter from the US Gulf of Mexico which are, as I have said before, the higher cash margin barrels. The Upstream cash flow from operations in Q1 2019 also include a cash tax payment of approximately $500 million relating to the agreement signed between Shell and the Government of Oman in Q2 2018. These payments will offset future tax payments from 2020 onwards.

In our Downstream business, our cash flow from operations is $3.7 billion lower in Q1 2019 when compared to Q1 2018, largely due to the impact in working capital resulting from the higher inventory price and volume movements. In Q4 2018, we saw a help to cash flow from working capital movements largely linked to the fall in oil prices and reduced inventory levels. At that time, we flagged our expectation that this would partially reverse should prices increase, and in Q1 2019 we observed the closing Brent price move up versus last quarter. This change in price, in addition to our usual seasonal inventory movements, has contributed to an increase in working capital of some $3.5 billion from Q4 2018.

So, now that we have seen the business drivers, it is worth briefly touching upon how this all rolls up for Shell on the summary financials at both a pre and post-IFRS 16 level. I would first like to emphasize, implementing IFRS 16 does not change Shell's strategy or financial framework. We still have the same financial discipline, the same focus on results, and we are well on our way to become a world-class investment case. Cash flow from operations, excluding working capital movements, was $12.1 billion , including an IFRS 16 impact of $800 million. Our free cash flow for the quarter of $4 billion , includes an IFRS 16 impact of approximately $1.1 billion . This is the result of lease payments being reported under cash flow from financing and no longer under cash flow from operations and investing, therefore free cash flow. This was as expected, and was communicated in our IFRS 16 call.

Capital investment in the quarter was $6.7 billion . This includes a $700 million impact due to IFRS 16, as it now includes the capitalization of operating leases in the period. As highlighted in the IFRS 16 call, in order to improve the transparency of our capital expenditure and the cash implications of our financial framework, we are introducing a new metric -- cash capital expenditure, as from Q1 2019. In Q1 2019, our cash capital expenditure was $5.6 billion .

And finally, our gearing increased, as mentioned earlier, from 21.9% to 26.5%, in line with our expected increase as a result of the accounting change. We now recognize operating lease liabilities on the balance sheet, resulting in higher debt and capital employed, and therefore increasing the quoted gearing percentage. And while our gearing might fluctuate from quarter to quarter, the underlying trend on gearing is moving in the right direction and we are progressing toward our 20% target on a pre-IFRS 16 basis, or 25% on a post-IFRS 16 basis.

Let me summarize. Q1 was another good quarter for Shell, across all of our businesses. Our delivery reflects the strength of our strategy, portfolio, and operational performance. Capital and operating expense discipline remains key to achieving competitive returns. We continue to focus on consistent delivery and performance in the short term and we are confident in meeting our 2020 outlook. We are also building our business to generate profitable and resilient cash flows into the 2020s. And, all of this is built with continued disciplined management of our financial framework. I look forward to providing more details on our strategy and post-2020 outlook at our Management Day event in June.

[fjgooner] 07/5/2019 11:40

I posted this last week. Please see below for the related Q1 2019 Earnings Call Transcript so that you can review Jessica's remarks verbatim rather than my interpretation.

fjgooner
2 May '19 - 16:35 - 5752

In the webcast conference call this afternoon, Jessica Uhl all but confirmed that future dividend increases form part of the story that describes Shell's transition to a world class investment case.

I can't recall the exact words, but it's about 4/5ths of the way through the analyst calls if you wish to review.

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

Jessica Uhl -- Chief Financial Officer

.....

In terms of the dividend increase question, I get it. And what I would say is a couple of things. First of all, again, this will be an important part of the engagement that we'll have at Management Day in June. We recognize this is a really important part of the story for investors to have a sense of what we're thinking and how in our strategy with respect to shareholder distributions going into 2020s. So I'd say that's going to be a core piece of that engagement.

What I'd share now is a couple of things. Hopefully, everyone has seen our commitment to increasing shareholder distributions, turning off the script, starting the share buyback program and then the share volume, the shareholder distributions that we've been able to achieve, again highest in the sector. And of course, we increased our share buyback from $2.5 billion to $2.75 billion in terms of the mandate this quarter, which is another signal in terms of confidence in our underlying cash generation and our commitment to the overall program.

So the commitment to the shareholder distributions and increasing shareholder distributions, I hope is clear. I would also say that through time to deliver on our world-class investment case and achieve number one total shareholder return, increasing dividends and ensuring dividend per share increases through time needs to be a part of that story. And so, I recognize that needs to be a part of it.

Today where we sit, we're the largest dividend payer in the world. We've got clear commitments on the share buybacks. Our dividend yield is around 6%. All of those things, I think, point to the right strategy today, which is focusing on the share buybacks. But at some point in time, increasing share -- dividends per share will need to be a part of the story.

[fjgooner] 07/5/2019 11:08

@spud.

Agreed. Just picked up another small batch at 24.145.

Very happy with that for the long term. :)

[grupo] 07/5/2019 10:55

ENERGYVOICE

New Shell LNG terminal sees Gibraltar switch to natural gas
by David McPhee
07/05/2019, 9:24 am

Image by lutz6078 from Pixabay.
Image by lutz6078 from Pixabay.
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The opening of a new Shell liquified natural gas (LNG) terminal in Gibraltar has seen the British overseas territory transition from diesel power.

Construction on the newly commissioned 80-megawatt (MW) gas terminal was recently completed by Shell and Gasnor, a 100% Shell-owned subsidiary.

The creation of the terminal is part of a deal agreed between Shell and Her Majesty’s Government of Gibraltar in 2016.

Gasnor will act as operator of the new LNG terminal.

Fabian Picardo, Gibraltar’s chief minister, said: “I am immensely proud that, under this government, we have made the crucial switch to cleaner power generation.

“Instead of using old technology up on the skyline of the Rock, we can now look forward to at least 20 years of clean, safe, gas-fired power generation from the port.

“This is a wonderful step-change in technology.”

Shell said LNG will be delivered to the terminal by ship twice a month and at night, minimising disruption to the neighbouring port and airport.

It will be stored in five double-walled stainless-steel tanks, each able to hold 1,000 cubic metres of LNG.

Maarten Wetselaar, integrated gas and new energies director for Shell, said: “I would like to congratulate Gibraltar on bringing its vision of a cleaner energy system to reality.

“Delivering this project is a tangible example of Shell’s strategy to provide more and cleaner energy. We believe that projects like this can offer real benefits elsewhere in the world.”

[spud] 07/5/2019 09:49

Yield now up to 6%!Christmas twice in 2019 is now official :-))spud

[grupo] 07/5/2019 08:33

PROACTIVEINVESTORS


ITM Power extends hydrogen refuelling stations collaboration with Shell
07:43 07 May 2019
“We have been working together since 2015 and have developed a trusted partnership that forms a solid basis to expand in the UK and worldwide.”
ITM Power, Shell location
Two HRS locations are presently active, two more will be added this year

ITM Power PLC (LON:ITM) has extended its contract with Shell for the company’s hydrogen-based vehicle refueling collaboration.

A new agreement replaces a 2015 deal and extends the contract out to 2024.

It covers the two existing hydrogen refuelling stations (HRS), located at Shell service stations – one at Cobham on the M25 and one at Beaconsfield on the M40 – as well as four new locations.
READ: ITM Power making headway in the drive for clean fuel

The company expects to open new HRS at Gatwick and Derby later this year, and, two additional London-based HRS are also planned.

"We are delighted to announce our continued collaboration with Shell,” said Graham Cooley, ITM chief executive.

“We have been working together since 2015 and have developed a trusted partnership that forms a solid basis to expand in the UK and worldwide.”

Mike Copson, of Shell Hydrogen, added: “The successes we have achieved at Shell Cobham and Shell Beaconsfield are a strong step toward making Hydrogen a convenient and viable fuel choice, and we look forward to continuing to expand the UK's developing network."

ITM noted that the UK hydrogen refuelling station network has been jointly funded by the UK's Office for Low Emission Vehicles and the Fuel Cells and Hydrogen Joint Undertaking.

[waldron] 07/5/2019 07:34

European markets seen lower amid US and China trade tensions
Published 23 min ago
Elliot Smith
@ElliotSmithCNBC




Key Points

European stocks are set to open lower Tuesday morning, after a reignition of trade tension between the U.S. and China weighed on market sentiment.
FTSE 100, CAC and Dax indexes all set to open lower after Monday’s heightening of trade tensions between the U.S. and China.

European stocks are set to open lower Tuesday morning, after a reignition of trade tension between the U.S. and China weighed on market sentiment.

The FTSE 100 is seen 27 points lower than its Friday close after U.K. markets were closed Monday for a public holiday, opening around 7,353. Meanwhile the CAC is expected to open around 20 points lower at 5,463, while the DAX is poised to start down around 25 points at 12,261, according to IG.