Callum Turcan: October 17, 2018

Summary

• Going over Royal Dutch Shell’s LNG Canada endeavor.
• The pros and the cons.
• Why this is ultimately a good idea.

Royal Dutch Shell plc (NYSE:RDS.A) (NYSE:RDS.B) is making another big bet on liquefied natural gas, this time in Canada. On October 1, 2018, Royal Dutch Shell plc and its partners announced a positive investment decision on the ~US$31 billion (~40 billion Canadian dollars) Canada LNG venture. The goal is to bring an LNG export facility online in Kitimat, British Columbia, to take advantage of both its existing infrastructure (deep-water ports, roads, electricity grids) and its easy access to Asian markets. While I am a shareholder of Royal Dutch Shell, that doesn’t mean I want to be a cheerleader for every decision the company makes. Here is what I view as a very reasonable assessment of LNG Canada, highlighting both the pros and cons of this endeavor. Let’s dig in. read more

Oct. 1, 2018 11:25 AM ET| By: Carl Surran, SA News Editor

An energy consortium led by Royal Dutch Shell (RDS.A, RDS.B) and Eni (NYSE:E) developing the Karachaganak gas condensate field will pay $1.1B to Kazakhstan’s government to settle a profit-sharing dispute, the country’s energy ministry says.

Kazakhstan says its production sharing agreement with the consortium also will amend terms so that it will receive a higher share of future revenues from one of the country’s biggest hydrocarbon fields. read more

Sep. 24, 2018 6:06 PM ET| By: Carl Surran, SA News Editor

Sep. 17, 2018 3:45 PM ET| By Carl Surran, SA News Editor

Sep. 6, 2018 1:30 PM ET|By: Carl Surran, SA News Editor

Aristofanis Papadatos: 25 August 2018

Summary

• Royal Dutch Shell has not cut its dividend since World War II and is currently offering a 5.6% dividend yield.
• The oil major has frozen its dividend for 18 consecutive quarters.
• The big question is whether it will raise its dividend amid excessive free cash flows and a brightening outlook of the oil sector.

Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) is an oil giant that has benefited from the rally of the oil price in the last 12 months, just like its peers. However, the oil major has paid the same dividend for 18 consecutive quarters, as it froze its dividend at the onset of the downturn of the oil market that began in 2014. Therefore, the big question is whether the company will raise its dividend in the upcoming quarters.

Dividend record

Despite the downturn that began in 2014, Exxon Mobil (XOM), Chevron (CVX) and Total (TOT) have continued to raise their dividends, albeit at a low single-digit rate. BP (BP) followed the same path as Shell and froze its dividend for 15 consecutive quarters, but eventually raised it in the running quarter, thanks to the strength of the oil price and the brightening outlook of the oil market. Therefore, Shell is the only oil major that has kept its dividend flat for such a long period. read more

Aug. 14, 2018 6:19 PM ET| By: Carl Surran, SA News Editor

Aug. 13, 2018 12:14 PM ET|By: Carl Surran, SA News Editor

Aug. 5, 2018 8:37 AM ET

Summary

• Shell daily production dipped slightly in Q-2, causing a miss of EPS by 0.15 share.
• Investors were not impressed and discarded the stock in droves.
• In late May it reached an all time high stock price. It has since back-tracked about 10% and we are dipping our toes in at present levels.
• Shell has been transforming it’s business model in recent years, and may now deserve a higher multiple.
• Further, the 25 billion dollar stock buy back will tend to put upward pressure on the share prices.

Introduction

We were a little shocked at Shell’s, (RDS.A,RDS.B) decline on it’s Q-2 earnings release. Any serious review of operations could have foretold it. When you sell off $30 bn worth of assets that produce oil, you’re going to see a decline of this type. I mean seriously, we’re talking about 40K BOPD essentially on a company that produces over 3.5mm BOPD.

Perhaps large investors were wondering if the company is allocating capital in sufficient amounts to maintain and grow production. When we look we see that the company has been investing at a consistent rate to maintain production longer term. read more

By Zoltan Ban: 20 July 2018

Summary

By: Carl Surran, SA News Editor: 20 July 2018

By: Carl Surran, SA News Editor: 12 July 2018

Jul. 11, 2018 11:41 AM ET|By: Carl Surran, SA News Editor

Jun. 30, 2018 12:54 AM ET

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. read more

Jun. 29, 2018 5:15 PM ET|By: Carl Surran, SA News Editor

Production at the Groningen natural gas field will come in lower than expected this year as the Dutch government works to end production completely by 2030 in an effort to limit seismic risks in the region.

Output will have fallen to 19B-20B cm in the year ending October 2018, the Dutch gas sector regulator says, below the original cap of 21.6B cm set for the year and down from 24B cm last year.

The Groningen field is a joint venture of Royal Dutch Shell (RDS.A, RDS.B) and Exxon Mobil (NYSE:XOM). read more

Royal Dutch Shell (RDS.A, RDS.B) approves its second North Sea project in six months, moving forward with development of the Fram natural gas field it considered uneconomical to produce six years ago.

Shell, along with partner Exxon Mobil (XOM -1.7%), says it plans to produce as much as 13K boe/day from two wells in the Fram field by 2020, adding ~10% to the company’s current output in the U.K. North Sea.

Steve Phimister, head of Shell’s U.K. exploration and production unit, says deep cost cuts following crude’s decline and connecting smaller oil and gas pools to bigger projects are allowing it to squeeze more out of an aging North Sea, and that the company may take several more investment decisions in the North Sea this year because of the improved economics. read more

REUTERS STAFF: JUNE 13, 2018 / 4:03 PM

ROME (Reuters) – Italy’s Supreme Court threw out an appeal from Shell and four former Shell managers to stymie a corruption trial that has also involved Eni’s chief executive, legal sources said on Wednesday.

The long-running graft case on alleged corruption in Nigeria, revolves around the 2011 purchase by Eni and Shell of Nigeria’s OPL-245 offshore oilfield for about $1.3 billion. The trial began last month, with the next hearing set for June 20. read more

Jun. 13, 2018 12:05 PM ET|By: Carl Surran, SA News Editor

Italy’s Supreme Court rejects an appeal from Royal Dutch Shell (RDS.A, RDS.B) and four former Shell managers to reverse a trial on alleged corruption in Nigeria, which also has implicated Eni (NYSE:E) CEO Claudio Descalzi.

The appeal hoped to reverse the trial to the preliminary hearing stage due to what it said were procedural errors, but the court ruled that the appeal was inadmissible.

Nine current and former company executives or contractors, including Descalzi, are accused by Italian prosecutors of paying bribes to secure the license to explore Nigeria’s OPL-245 offshore oilfield, which holds ~9B barrels of oil but has never entered production. read more

Jun. 8, 2018 10:39 AM ET|By: Carl Surran, SA News Editor

Jun. 5, 2018 1:09 AM ET

Summary

• Shell has made a huge bet on a deeply buried resource in the Gulf of Mexico.
• In this article we explain, why they continue to spend billions of dollars in Deepwater, when other companies have abandoned it.
• We also provide a range where we would consider adding to our Shell position.

FULL ARTICLE

May 25, 2018 12:58 PM ET|By: Carl Surran, SA News Editor

A confidential study that Royal Dutch Shell (RDS.A, RDS.B) has been accused of trying to shield from public view showed worsening “catastrophic” pollution around oil spill sites in Nigeria, WSJ reports.

At least one of the study’s authors has urged the findings to be widely distributed because they pointed to significant health risks to the local Bodo community in Nigeria but said that Shell had denied him permission to publish the study’s results in a scientific journal, according to the WSJ report. read more

A federal judge yesterday said he needed more information before deciding whether to dismiss lawsuits by the cities of San Francisco and Oakland alleging that Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), Royal Dutch Shell (RDS.A, RDS.B), BP and ConocoPhillips (NYSE:COP) should pay to protect residents from the impacts of climate change.

The judge also wants the companies to produce additional material backing up claims that they should not be a part of the case because the court lacked jurisdiction over them. read more

Tristan R. Brown: April 30, 2018

Summary

• Royal Dutch Shell’s latest Energy Transition Report contains a demand outlook for oil and gas that is quite conservative compared to its industry peers.
• The company’s demand outlook is higher than what will likely be possible if the Paris Climate Agreement’s emissions targets are to be achieved, however.
• Almost 90% of respondents in a recent survey of major asset managers believe that climate risks will have a “significant” impact on oil and gas company valuations in the near-term.

The release of two separate reports in as many weeks on how integrated oil and gas producers will manage an anticipated transition toward low-carbon energy is likely to leave investors in Royal Dutch Shell (RDS.A)(RDS.B) with some questions. The company released its new Energy Transition Report earlier this month, and the final product presents its strategy for maintaining its operations even as the world’s major economies (with the exception of the U.S.) work to meet their greenhouse gas emission reduction targets under the Paris Climate Agreement. The report’s relatively phlegmatic conclusion stands in stark contrast to the results of an annual survey by the UK Sustainable Investment and Finance Association that identified strong concern from asset managers on the same count. read more

Tristan R. Brown: Apr. 16, 2018 12:44 PM ET

Summary

• A Netherlands environmental NGO has threatened to bring yet another climate change lawsuit against Royal Dutch Shell if it does not fundamentally change its business operations.
• While multinational corporations are constantly being threatened with legal action, this specific one is unique.
• It has the hallmarks of recent climate lawsuits against Shell in the U.S., but would be based in a court system that has mandated stricter climate policy before.

Can non-shareholder private entities force oil and gas companies to accept lower returns on capital? Investors in Royal Dutch Shell (RDS.A) (RDS.B) will receive an answer to this question if an environmental NGO moves forward with a threatened lawsuit in the Netherlands that would require the company to do exactly that.

Notably, Shell recently committed to reducing its greenhouse gas emissions by 50% through 2050 via billions of dollars of investments in renewable energy capacity. The NGO in question, Friends of the Earth Netherlands (aka Milieudefensie), deems this effort insufficient and insists that the company must abandon its oil and gas reserves and be “net zero” (i.e., no net emissions of greenhouse gases) by that date instead. While Shell’s investors largely shrugged off the threat (see figure), if they even noticed it at all, the development represents the opening of a new front in the lawsuits being waged by U.S. municipalities against the company and its Big Oil competitors. read more

Royal Dutch Shell (RDS.A, RDS.B) urges shareholders to oppose a resolutionfrom activist investors that would hold the company to firm targets for cutting carbon emissions, even as it reiterates its commitment to fighting climate change.

Climate activist Follow This is offering a resolution for Shell’s May 22 annual general meeting urging the company to set more aggressive targets aligned with the Paris climate deal goal of limiting global warming to “well below” 2 degrees Celsius.

“We will not be tied to an approach that potentially moves too quickly or too slowly to this transition,” says CEO Ben van Beurden. “If society finds a way to go faster, we will go faster… but we cannot do it single-handedly.” read more

Mar. 29, 2018 10:57 AM ET|By: Carl Surran, SA News Editor

The Dutch government says it will phase out gas production at the Groningen field by 2030 as part of efforts to reduce the danger caused by small but damaging earthquakes.

Production is set for 21.6B cm this year, already down from a peak of 53.8B cm in 2013, and is planned to fall to below 20B cm for the production year beginning October 2018 and to below 17.5B cm for the 2019 year, assuming average temperatures, then to 12B cm in the coming 4-5 years and to zero at the end of the 2020s. read more

Mar. 26, 2018 2:16 PM ET|By: Carl Surran, SA News Editor

Summary

• Shell declared an income of $13.4 billion compared to $4.8 billion in 2016.
• Merger with BG was a game-changer for Shell.
• Shell has now positioned itself as an energy company that is ready to embrace new challenges.

Headquartered in the Hague, Netherlands, Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) has established itself as one of the most prominent oil and gas companies in the world. Although the last few years have been tough for the energy giant, Royal Dutch Shell has now started making the right moves, which will reap benefits in near future.

In its recently published Annual report for 2017, Shell declared an income of $13.4 billion compared to $4.8 billion in 2016. Although it must be noted that high oil and natural gas prices contributed to this yearly gain, a year-on-year increase of 279% is commendable. read more

Shell to exit New Zealand after more than 100 years: Financial Times 16 March 2018

Royal Dutch Shell is quitting New Zealand after more than 100 years: Verdict 16 March 2018

Shell pares New Zealand portfolio with $578M asset sale: Seeking Alpha 15 March 2018

Shell to sell remaining NZ assets to OMV for US$578 million: Scoop 16 March 2018

Shell close to easing out Petronas to clinch Hong Kong’s LNG import deal:THEStarONLINE Friday 16March 2018

Royal Dutch Shell boss handed €900,000 pay rise – to an annual package of around €9m: Independent.ie 15 March 2018

Shell CEO’s pay in 2017 rises to 8.9 million euros: Reuters 15 March 2018

Royal Dutch Shell boss handed near-£800,000 pay rise read more

Mar. 9, 2018 6:21 PM ET|About: BP p.l.c. (BP)|By: Carl Surran, SA News Editor

Zoltan Ban: 28 FEB 2018

Summary

• Shell’s long term vision of oil prices is rather negative, leading to moves to cut reliance on high-cost projects.
• Natural gas on the other hand is seen as a growth industry for the longer term, which is why it invests in upstream, as well as downstream & LNG.
• While I think Shell’s views on oil prices going forward is overly negative, I do think that prices will be volatile, so it is the right strategy.

Perhaps nothing highlights Shell’s (RDS.A) (NYSE:RDS.B) current leadership mindset more than its decision to sell its oil sands interests for net $7.25 billion last year. It is a mindset borne out of the belief at the top of this company’s leadership structure that there is a strong probability that oil prices will stay weak for perhaps decades to come, as demand destruction due to environmental concerns, as well as technological change will perhaps cause a peak in demand as soon as a decade from now. I personally do not share this view, yet as an investor in this company I am glad that it is making some of the structural changes that Shell is currently undertaking, because I do believe that it will transform it into one of the better energy companies out there. It will not only thrive during the good times, but it will also prove to be resilient during the bad. read more

Feb. 14, 2018 10:39 AM ET|By: Carl Surran, SA News Editor read more

Royal Dutch Shell’s (RDS.A, RDS.B) Shell Chemical LP will install and operate a $10M pollution monitoring and control system at its Norco, La., chemical plant as part of a settlement over allegations it violated the Clean Air Act, the Department of Justice says.

The pollution controls are estimated to reduce air emissions of volatile organic compounds by ~159 tons/year and cut other harmful air pollutants, including benzene, by 18 tons/year.

Shell Chemical also will pay $350K in civil penalties as part of the consent decree. read more

Power Hedge: 8 FEB 2018

Summary

Analysts and the financial media were very excited about Royal Dutch Shell’s Q4 2017 results, but there is a lot to be concerned about here.

The company divested more than 250kboe/day in producing assets, which juiced its net income but hurt total production.

The company’s three-year RRR is only 78% with an 8.9-year reserve life. This needs to be corrected quickly if the company is to survive.

Royal Dutch Shell failed to generate sufficient cash to pay its shareholder distributions over the past few years but finally appears to have corrected this problem. read more

Royal Dutch Shell PLC (NYSE:RDS.A) Q4 2017 Earnings Conference Call February 1, 2018 9:00 AM ET

Executives

Ben van Beurden – CEO and Director

Jessica Uhl – CFO and Executive Director

Analysts

Michele Vigna – Goldman Sachs Group

Jason Gammel – Jefferies LLC

Christyan Malek – JPMorgan Chase & Co.

Theepan Jothilingam – Exane BNP Paribas

Iain Reid – Macquarie Research

Lydia Rainforth – Barclays PLC

Oswald Clint – Sanford C. Bernstein & Co.

Jason Kenney – Grupo Santander

Thomas Adolff – Crédit Suisse AG

Jonathon Rigby – UBS Investment Bank read more

The Value Portfolio: Jan 23, 2018

Summary

• Royal Dutch Shell took advantage of the market downturn to acquire BG Group. That let the company grow by 50%, something that has supported production significantly.
• Royal Dutch Shell anticipates cash flow of $25-30 billion by 2020, and that could grow to almost $50 billion with recovering oil prices. That will result in significant reward to shareholders.
• I think LNG will be an especially rewarding opportunity for Royal Dutch Shell going forward. That could help the company’s cash flow to grow even further.

Royal Dutch Shell (NYSE:RDS.A) (NYSE: RDS.B) has been on a tear recently, growing to a $300 billion oil giant, making it the second-largest publicly traded oil company in the world. Yet the company isn’t done. A combination of the company’s integration of its more than $50 billion acquisition of BG Group, at an opportune time, combined with the company’s strong portfolio and its growth potential makes the company a royally good investment.

BG Group Combination

The company’s acquisition of BG Group, at a time when the oil markets were dropping, was viewed with various opinions. Many wanted the company to not issue shares when prices were low and preserve cash. However, the company paying for roughly 40% of the acquisition with cash minimized the dilution to shareholders. And it enabled the company to gain access to strong assets at a great time. read more

Jan. 18, 2018 6:58 PM ET|By: Carl Surran, SA News Editor

Dutch gas company NAM says it will propose reducing production at the Groningen gas field following an earthquake on Monday that was the largest in recent years.

NAM, a Royal Dutch Shell (RDS.A, RDS.B) and Exxon Mobil (NYSE:XOM) joint venture that operates the Groningen field, says it will propose a shutdown of some production clusters, leading to a lower production volume overall.

The Dutch government has cut gas production several times in recent years from 39.4B cm in 2015-16, as decades of gas extraction have led to dozens of earthquakes every year in the Groningen region; the new government already agreed to cut output to ~20B cm by 2021 from a current 21.6B cm. read more

Fun Trading: 18 Dec 2017

Summary

• Shell announced that production from the Shearwater and Nelson platforms in the central North Sea had been suspended due to Forties pipeline shutdown.
• Forties pipeline is a vital artery of the North Sea production. Production loss is estimated at about 400K Boep/d which is significant and may boost oil prices for weeks.
• This situation could be considered as a net positive for Shell and other oil majors.

Investment Thesis:

Royal Dutch Shell (RDS.A) (RDS.B), BP P.l.c (BP), and Exxon Mobil (XOM) are the most reliable long-term oil companies and should be part of your main oil portfolio. However, this special status comes with the shareholders’ obligation to follow tightly what is going on with the company on the day-to-day news which may eventually change the future outlook — in this case with a potential production cut. This is exactly what I intend to discuss today. read more

Tristan R. Brown: 18 Dec 2017

Summary

• Royal Dutch Shell doubled down on its previously-announced investments in clean energy earlier this month when its CEO told investors that it has raised this to $2 billion next year.
• The company also announced its intention to reduced its greenhouse gas emissions by 50% through 2050.
• While the success of Shell’s proposed energy transition remains uncertain, its plans reflect recent developments in the energy markets and multinational policymaking.

Last July the multinational petroleum and gas giant Royal Dutch Shell (RDS.A)(RDS.B) announced its intention to spend $1 billion a year on clean energy investments through its New Energy division. As I highlighted the following month, this decision was set against a busy backdrop of involvement by the company in the Climate Leadership Council, which (unsuccessfully) urged the Trump administration to keep the U.S. in the Paris Climate Accord, and investments in renewable electricity capacity. Those maneuvers, it turns out, were just the opening moves. As reported by The New York Times last week, Shell’s transition from a fossil fuel producer to a broader energy provider is rapidly accelerating. read more

Dividend Stream: Nov. 30, 2017

Summary

• Royal Dutch Shell held its annual analyst day earlier this week.
• Management expects to generate at least $25 billion in excess cash flow by 2019.
• Despite rising share prices, Shell can still be picked up here.
• This idea was discussed in more depth with members of my private investing community, Streaming Income.

The recovery in oil and gas is in full swing. While benchmark crude oil prices have gone up across the board, Brent is now $63 per barrel, the catalyst for this recovery comes more in the fact that oil producers have done such a good job in bringing costs down.

Nowhere is that more starkly noticeable than in offshore, deepwater drilling, where dayrates for state-of-the-art rigs have gone from as high as $700,000 three years ago to just $250,000 or so. As onshore rig counts creep higher, cost inflation is once again becoming a fact of life in select onshore shale plays. With deepwater drilling, however, there are still many rigs ‘stacked’ in harbors across the world just waiting to come out and get activated, thereby keeping development and operational costs down. read more

Exxon Mobil (NYSE:XOM), BP, Royal Dutch Shell (RDS.A, RDS.B) and other oil companies are spending millions of dollars per year working with automakers including Ford (NYSE:F) and Fiat Chrysler (NYSE:FCAU) to improve the internal combustion engine and help it compete with electric vehicles, WSJreports.

The companies are hoping new, thinner lubricants will help squeeze even more efficiency out of traditional car engines, allowing them to comply with stricter environmental rules and remain relevant as new technologies such as zero-emission electric vehicles emerge. read more

Nov. 20, 2017 5:49 PM ET|By: Carl Surran, SA News Editor

Two oil sands upgraders in Alberta – Royal Dutch Shell (RDS.A, RDS.B) and Suncor Energy’s (NYSE:SU) Syncrude – are warning customers about cuts to synthetic crude output in November because of upsets at the plants, Reuters reports.

Shell Canada is telling customers that synthetic crude volumes from its 255K bbl/day Scotford upgrader may be lowered this month and possibly next month because of a valve leak, and the Syncrude oil sands project, which has capacity to produce nearly 350K bbl/day, also is telling customers it will cut synthetic crude volumes by ~5% in November, according to the report. read more

Aristofanis Papadatos: Nov 16, 2017

Summary

• Royal Dutch Shell has not cut its dividend since World War II.
• However, the company has paid the same dividend for 15 consecutive quarters.
• Therefore, the big question is if and when its shareholders should expect the next dividend hike.

Royal Dutch Shell (RDS.A) (NYSE:RDS.B) offers a generous dividend yield, which currently stands at 5.9%. Nevertheless, the oil major has paid the same dividend for 15 consecutive quarters. Therefore, as most of its shareholders are holding the stock for its dividend, it is only natural that they wonder if and when they should expect the next dividend hike.

First of all, Shell has an enviable record in dividend payments to its shareholders. To be sure, the company has not cut its dividend since World War II. This achievement certainly confirms the exceptional business performance of the company. However, the company has markedly slowed its dividend growth rate during the last decade, as it has raised it by only 2.7% on average during this period. read more

SOURCE

RELATED

DutchNews.nl: Gas group NAM says more serious earthquakes will hit Groningen: 1 October 2014

EnergyVoice.com: Quakes force Dutch lawmakers to cut gas production: 11 March 2015

Bloomberg: Dutch Quakes Toss Wrench Into Gears of Europe Gas Market: 10 March 2015

Devastating report of a scary scenario: 07 March 2015

Dutch government says sorry for quakes caused by Groningen gas field: 02 March 2015

Reuters: Bells toll for Europe’s largest gas field: 02 March 2015

Groningen Gas Field Shock: Risk of earthquakes at 4.6 on the Richter scale: 24 Feb 2015 read more