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The Guardian: Shell shares fall as reserves concerns weigh

Reuters
Tuesday January 29 2008
(Adds closing shares, analysts)

By Tom Bergin

LONDON, Jan 29 (Reuters) – Shares in Royal Dutch Shell Plc fell on Tuesday on concerns that the oil major had little luck adding new reserves last year after a report that it wouldn’t publish such figures with its annual results this week.

Shell’s London-listed “A” shares closed down 0.6 percent at 1808 pence, compared with a 1.35 percent rise in the DJ Stoxx European oil and gas sector index.

The Daily Telegraph reported on Tuesday that Shell would not report its 2007 reserve replacement ratio (RRR) — the rate at which production is matched with new finds — on Thursday when it releases its fourth-quarter results, as it has done in the past.

A Shell spokesman said the company announced at its third quarter results in October that it would move to report its RRR with its 20-F U.S. regulatory filing. This can be published from March to June, analysts said.

Recently published analysts’ previews for Shell’s results had already noted that the RRR would not be reported on Thursday, though they had hoped for some guidance.
“I would have thought it was quite widely known about,” one said.

But analysts at Dresdner Kleinwort said in a research note on Monday that the company was not even planning to comment on reserves, which may have added to investor concerns that the news, when it emerges, will be bad.

Analysts predict the replacement ratio will be low because of Shell’s loss of a controlling stake in the Sakhalin-2 project last year and failure to register any major finds last year. The Shell spokesman said the decision to delay reporting the RRR was in line with the practice followed by U.S. rivals such as Exxon Mobil.

Analysts and investors noted, however, that London-based rival BP still reports its RRR with year-end results.

“In the last few years, there’s a trend of giving less and less information,” one fund manager said.

(Editing by Will Waterman)

http://www.guardian.co.uk/feedarticle?id=7265052

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