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Shell completes $4.4 billion in sales a day before earnings report

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Dutch supermajor trying to dump $30 billion in assets in order to shape the company “into a world class investment.”

By Daniel J. Graeber  |  Nov. 1, 2017 at 6:17 AM

Nov. 1 (UPI) — Royal Dutch Shell said Wednesday it made further progress in a major divestment plan by completing the sale of assets in Gabon and in the North Sea. For $628 million, Shell said it completed the sale of its entire Gabonese oil and gas interests to a company controlled by The Carlyle Group. The transaction includes the sale of all of Shell’s onshore oil and gas interests, which includes nine total fields, and the associated infrastructure, including pipelines and export terminals.

Shell last year produced an average 41,000 barrels of oil equivalent per day from Gabon. When disclosing the intention of the sale earlier this year, Andy Brown, a director for Shell exploration and production programs, said the decision “was not taken lightly.”

French energy major Total in February said it was taking advantage of improved market conditions by selling mature assets in Gabon to Anglo-French company Perenco for $350 million.

In a separate statement, the Dutch supermajor said it completed the sale of North Sea holdings to Chrysaor for a total of up to $3.8 billion. The sale includes Shell’s 21.7 percent interest in the legacy Buzzard field and the 10 stake in the Schiehallion field.

BP has produced nearly 400 million barrels of oil from Schiehallion since production started in the late 1990s and the company said redevelopment could yield another 450 million barrels and extend the field’s life into the 2030s.

Phil Kirk, the chief executive at Chrysaor, said in a statement the company is now a leading exploration and production company in the North Sea with the acquisition, with puts about 120,000 net barrels of oil equivalent per day in its pocket.

“With improving operating costs, competitive fiscal terms and a world class skills base, the North Sea is undergoing a period of rejuvenation,” Chairperson Linda Cook added.

Shell said the sales show “clear momentum” behind the effort to shed $30 billion in assets and “re-shape the company into a world class investment.” The company reports its third quarter earnings on Thursday. Net profit for the second quarter was $3.6 billion, up from the $1 billion reported for the second quarter 2016. From the first quarter, however, net profit is down about 4 percent.


Royal Dutch Shell takes cashflow crown off Exxon Mobil

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Royal Dutch Shell has taken Exxon Mobil’s cashflow crown, a year after completing the biggest deal in its history.

Europe’s largest energy company vaulted ahead on this closely watched indicator of financial health in the first nine months of 2017 as assets acquired from BG Group from Brazil to Australia churned out cash. For the year as a whole, Shell is on course to surpass its larger US rival on the measure for the first time in about two decades.

Shell generated $28.38 billion (€24.34bn) of cashflow from operations in the first nine months of the year, compared with $23.52 billion (€20.18bn) from Exxon. Chief executive Ben Van Beurden has already spelled out that his main long-term goal was overtaking Exxon to become the best-performing oil major.

“We’re doing a very good job in terms of positioning ourselves as the No 1 company in the sector,” chief financial officer Jessica Uhl said Thursday on a conference call. “We’re consistently delivering the highest cash flow in the sector. Frankly, we’re reshaping the company in terms of our cost structure and our capital efficiency.”

Still, Shell’s market value and total output remain below that of Exxon. The Anglo-Dutch company piled on borrowings to buy BG, and though Mr Van Beurden has made reducing that burden his top financial priority, third-quarter net debt of $67.7 billion (€58bn) was higher than the preceding period.

Dividend

Shell also failed to cover its dividend with free cashflow, although it has done so in aggregate over the past 12 months.

“It will take time for Shell to surpass Exxon, but it is on the right track,” said Ahmed Ben Salem, an analyst at Oddo Securities in Paris, who has a buy rating on the shares. “The company needs to keep generating $10 billion of cash every quarter to cover spending and the full dividend, and it has the assets to achieve that.”

Third-quarter profit adjusted for one-time items was $4.1 billion, an increase of 47 per cent from a year earlier and higher than the average analyst estimate of $3.62 billion. Oil and gas output was 3.657 million barrels of oil equivalent a day, up from 3.595 million a year earlier. Exxon produced 3.88 million barrels a day. – Bloomberg

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Shell Prelude FLNG named as FieldComm Group 2017 Plant of the Year

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06 November 2017

The Shell Prelude Floating Liquefied Natural Gas (FLNG) plant/ship of Royal Dutch Shell, which will be located in the Timor Sea off the North West coast of Australia, has been named as the FieldComm Group 2017 Plant of the Year.

Having recently completed the journey to its final destination, 200-km off the Australian mainland, it will be connected to Deepwater gas wells and is scheduled to begin regular operations in 2018. The 488m x 71m vessel’s 14 production facilities, rising eight stories above the deck will extract and process around 3.6 million tonnes per year of liquefied natural gas (LNG) during its 25-year lifespan. FULL ARTICLE

Shell to Divest Interest in Woodside Petroleum for $1.7bn

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Royal Dutch Shell plc revealed Monday that it will sell part of its stake in Woodside Petroleum Limited to equity investors for around $1.7 billion.

The company’s subsidiary, Shell Energy Holdings Australia Limited (SEHAL), has entered into an underwriting agreement with two investment banks for the sale of 71.6 million shares in Woodside, representing 64 percent of its interest in the company and 8.5 percent of the issued capital, at a price of A$31.10 per share, resulting in total pre-tax proceeds of approximately $1.7 billion (A$2.2 billion).

The sale is expected to complete on November 14.

“Today’s announcement contributes to our strategy to reshape Shell, to deliver a world class investment case and to strengthen our financial framework. Proceeds will contribute to reducing our net-debt. This is another step towards the completion of our three-year $30 billion divestment program,” a Shell spokesperson told Rigzone.

“We maintain a significant presence in Australia through interests in a number of LNG projects, both operated and non-operated,” the spokesperson added.

Upon completion of the sale, SEHAL will continue to own a 4.8 percent interest in Woodside. SEHAL has agreed that it will not dispose of any of its remaining shares in Woodside for a minimum of 90 days from completion of the sell-down, with limited customary exceptions.

In November 2010 Shell sold 10 percent of the issued capital of Woodside, retaining a 24.27 percent interest. This interest was further diluted to 23.08 percent because of Shell’s decision not to participate in Woodside’s dividend re-investment program.

In June 2014, Shell sold approximately 78.27 million shares in Woodside representing 9.5 percent of Woodside’s issued share capital, retaining an interest of 13.58 percent. This interest was further diluted to 13.28 percent due to Shell not participating in Woodside’s dividend re-investment program.

Outside of its interest in Woodside, Shell has the following interests in Australia:

  • QGC venture (Shell operated, majority interest)
  • Arrow Energy (Shell 50 percent interest)
  • Gorgon LNG (Shell 25 percent interest)
  • North West Shelf (Shell 16.67 percent interest)
  • Prelude FLNG project (Shell operated 67.5 percent interest)
  • Browse Development venture (Shell 27 percent interest)
  • Sunrise LNG joint venture (Shell 26.6 percent interest)
  • Shell Energy Australia (Shell 100 percent interest)

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Shell to sell part of its Woodside Petroleum stake for $1.7 billion

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Reuters Staff: NOVEMBER 13, 2017

LONDON/SYDNEY (Reuters) – Royal Dutch Shell is selling part of its stake in Australia’s largest independent oil and gas company, Woodside Petroleum Ltd, to equity investors for about $1.7 billion.

Shell, which has been slowly divesting its Woodside holding, said on Monday its Shell Energy Holdings Australia Limited (SEHAL) unit had struck a deal with two investment banks over the sale of 71.6 million Woodside shares for A$31.10 ($23.79) apiece.

The oil major said that represented 64 percent of its interest in Woodside and 8.5 percent of the issued capital in Woodside. FULL ARTICLE

Woodside Falls Most in Year After Shell to Sell Stake

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  • Shares falls as much as 3.5% in early Australia trading

  • Allan Gray Australia says it boosts stake in the LNG producer

Woodside Petroleum Ltd. fell the most in a year after Europe’s biggest oil company, Royal Dutch Shell Plc, said it would offloaded its entire holding in the Australian liquefied natural gas producer for $2.7 billion. Woodside shares fell as much as 3.5 percent in intraday trading on Tuesday to A$31.10 ($23.74), and changed hands at A$31.19 at 11:51 a.m. in Sydney. Shell said it would sell an 8.5 percent stake in Woodside at A$31.10 a share, a 3.5 percent discount to Woodside’s closing price on Monday. The Anglo-Dutch company then expanded that sale overnight to exit its remaining 4.8 percent holding. FULL ARTICLE

Shell Says Yes To Free Cash Flow, No To Debt

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Callum Turcan: Nov 15, 2017

Summary

  • Royal Dutch Shell generates free cash flow in Q3.
  • Outlook for Q4, even in light of impending capex increase, looks bright due to Brent rallying.
  • Over $10 billion in net debt reduction since the end of Q3 2016.
  • Overview of Q3 results and what to expect going forward.

Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) has come a long way since it bottomed out in early-2016. Its latest earnings reportreinforced the notion that when Brent is trading in the $50s, Shell’s cash flow position becomes balanced. Cash flow neutrality is the key breakeven point for the industry in the current environment, as oil & gas giants need to show that they can cover capital expenditures and large dividends through organic means at realistic prices. Let’s check out how Royal Dutch Shell did in a low $50s Brent world, with an eye on organic cash inflows and outflows. FULL ARTICLE WITH CHARTS

China LNG imports set to hit record in Nov, push up prices

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With Royal Dutch Shell’s Prelude floating LNG project in Western Australia and Ichthys, a massive project led by Japan’s Inpex in the north of Australia, about to be completed, Australia’s export capacity could hit 85 million tonnes next year, topping that of current leader Qatar.

* China monthly LNG imports set to breach 4 mln T for first time

* That comes as millions of households switch to gas from coal 

* Domestic China LNG prices hit record

* Asian spot LNG prices at 3-year high of almost $10/mmBtu

* Rising Australia exports should ensure mkt remains well supplied

FULL ARTICLE


China LNG imports set to hit record in Nov, push up prices

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With Royal Dutch Shell’s Prelude floating LNG project in Western Australia and Ichthys, a massive project led by Japan’s Inpex in the north of Australia, about to be completed, Australia’s export capacity could hit 85 million tonnes next year, topping that of current leader Qatar.

SINGAPORE, Nov 29 (Reuters)

* China monthly LNG imports set to breach 4 mln T for first time

* That comes as millions of households switch to gas from coal 

* Domestic China LNG prices hit record

* Asian spot LNG prices at 3-year high of almost $10/mmBtu

* Rising Australia exports should ensure mkt remains well supplied

FULL ARTICLE

Shell damps down Prelude LNG expectations

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by Angela Macdonald-Smith: Nov 29, 2017

Royal Dutch Shell has sewn doubt in the market about an early 2018 start-up of the oil major’s innovative Prelude floating LNG project off the coast of north-west Australia, with chief executive Ben van Beurden signalling that the project will only start contributing noticeably to cash flow in 2019.

While the ramp-up of the $US54 billion (71 billion) Gorgon LNG project in Western Australia was named by Mr van Beurden as among projects named to help grow cash flows next year, Prelude was included in the later batch.

“Beyond 2018, in the 2019-2020 period I would expect another $US5 billion additional cash flow from operations,” Mr van Beurden told investors in a briefing in London late Tuesday Australian time.

“This would then include further start-ups in Brazil, the Gulf of Mexico and the ramp-up of Prelude and others.”

Shell still expects Prelude – the progress of which is being closely watched worldwide – to contribute to cash flows in 2018, a spokesman in Melbourne said. FULL ARTICLE

Shell, PetroChina jv paves way towards big gas development in Australia

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Reuters Staff: December 1, 2017

MELBOURNE (Reuters) – Royal Dutch Shell (RDSa.L) and PetroChina (601857.SS) have taken a big step towards a long awaited gas development in Australia, signing a 27-year deal to supply Shell’s Queensland Curtis Liquefied Natural Gas (QCLNG) project. The deal would bring to market about 5 trillion cubic feet of gas held by Shell and PetroChina’s Arrow Energy in the state of Queensland, Arrow said. FULL ARTICLE

Shell, PetroChina jv paves way towards big gas development in Australia

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Cole Latimer: DECEMBER 1, 2017

Arrow Energy has signed a 27-year deal to annually supply more than four times the forecast east coast domestic gas shortfall to Shell’s Queensland Curtis Liquefied Natural Gas (QCLNG) project. The agreement, which begins first gas production in 2021, will provide an extra 240 petajoules a year of gas from Queensland’s Surat Basin, or close to 6500 petajoules over the life of the contract, to the state’s market. Arrow and its joint owners, Shell and PetroChina, will now discuss the expansion of its Surat Basin project, with a final decision expected in 2018. FULL ARTICLE

Shell Strikes Deal for Australian Gas — WSJ

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By Robb M. Stewart Dow Jones Newswires

MELBOURNE, Australia — Royal Dutch Shell PLC (RDSA) has moved finally to unleash a massive natural-gas resource buried in coal deposits in eastern Australia in a development that will see fuel flow to its majority owned liquefied natural gas venture on the country’s tropical coast.

The energy giant and various partners have agreed to a 27-year sales deal covering 5 trillion cubic feet of gas that will anchor the staged development of the Arrow fields in Queensland. FULL ARTICLE

ExxonMobil, Chevron, Shell paid no tax in Australia for 2016

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Chevron reported A$2.1 billion in income for 2016 and paid no tax, while Shell Energy Holdings Australia – a unit of Royal Dutch Shell (RDSa.L) – reported A$4.2 billion in income and A$97 million in taxable income, but paid no tax. FULL ARTICLE

U.S. LNG exports reach a tipping point

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Steve Hill, executive vice president of Shell Energy, discusses Shell’s growth in the liquefied natural gas industry aboard Dynagas’ Lena River LNG carrier as its docked at Cheniere Energy’s Sabine Pass LNG

SABINE PASS, La. – In 2011, Cheniere Energy was a little-known company with big ambitions when it signed an $8 billion contract that would transform the United States into an exporter of liquefied natural gas after decades of relying on foreign suppliers. Five years later, just days before the Houston company shipped its first LNG cargo, another big deal gave a jolt to nascent U.S. industry. Royal Dutch Shell bought Cheniere’s customer, BG Gas for $50 billion, a move that made Shell the world’s largest international LNG producer and marketerand allied it with this nation’s biggest LNG exporter. Shell remains Cheniere’s best customer, buying almost half the production of Cheniere’s massive Sabine Pass LNG terminal. FULL ARTICLE


Eni Acquires Shell Stake in Australian Gas Field

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By Marc Bisbal Arias  Dow Jones Newswires

Eni SpA (ENI.MI) said Thursday that it has acquired the 32.5% stake in an Australian gas field owned by Royal Dutch Shell PLC (RDSA.LN)’s subsidiary Shell Australia Proprietary Ltd.

Terms of the deal were not disclosed.

The Evans Shoal field is located around 300 kilometers northwest of Darwin, where the Darwin liquefied natural gas plant is operating. The field is estimated to have at least 8 trillion cubic feet of raw gas in place, Eni said. The acquisition doubles Eni’s stake in the field to 65%.

The Italian company also said that it has become the operator of the retention lease NT/RL7 located in the north Bonaparte Basin, offshore Northern Australia.

Write to Marc Bisbal Arias at marc.bisbalarias@dowjones.com

(END) Dow Jones Newswires

December 21, 2017 06:04 ET (11:04 GMT)

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The world’s largest-ever vessel is all set to go in 2018

Italian oil and gas firm Eni buys out Shell’s stake in Evans Shoal gas field

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THE Italian oil and gas firm that operates the Blacktip gas project, which supplies gas for Territory domestic power generation, has taken another significant step forward in its growth plans off Northern Australia. ENI has bought out Shell’s stake in the large undeveloped Evans Shoal gas field 300km northwest of Darwin in the Timor Sea’s Bonaparte Basin. FULL ARTICLE

The top five oil and gas trends for 2018

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This year will be the year of the oil and gas revival, as prices lift performance and major projects come online. The Department of Industry, Innovation and Science has forecast LNG exports to reach $35 billion in value 2018. This will be driven by Chevron’s second Wheatstone LNG train coming online in the second quarter of the year, Inpex’s Ichthys project ramping up production, and Shell’s floating LNG ship Prelude coming into full operation. FULL ARTICLE

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The top five oil and gas trends for 2018 was first posted on January 28, 2018 at 4:14 pm.
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Shell LNG glut ‘conspicuously absent’: Shell CEO Ben van Beurden

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by Angela Macdonald-Smith: Feb 2 2018 at 12:03 PM: Updated Feb 2 2018 at 3:19 PM

Royal Dutch Shell chief executive Ben van Beurden has declared that the energy giant’s confidence in the LNG market has been justified with no sign of the oversupply that others had warned of. “The LNG glut is conspicuously absent isn’t it, much to the surprise of those that thought this was inevitable,” Mr van Beurden told reporters at Shell’s fourth-quarter results briefing in London. FULL ARTICLE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnews.net and cybergriping.com are all owned by John Donovan
Shell LNG glut ‘conspicuously absent’: Shell CEO Ben van Beurden was first posted on February 2, 2018 at 2:42 pm.
©2018 "Royal Dutch Shell Plc .com". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at john@shellnews.net
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