Showing posts with label Royal Dutch Shell. Show all posts
Showing posts with label Royal Dutch Shell. Show all posts

Wednesday, June 15, 2016

If You’re Thinking About Investing in Oil Stocks...Read This First

By Justin Spittler

Is it safe to buy oil stocks yet? If you’ve been reading the Dispatch, you know the price of oil has plunged more than 70% since June 2014. Thanks to a massive surge in production, oil hit its lowest price since 2003 earlier this year. New extraction methods like fracking made the production surge possible. Last year, global oil production hit an all time high. Since then, companies have been pumping far more oil than the world consumes.

America’s largest oil companies lost $67 billion last year..…
Falling profits caused oil stocks to plunge. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), a fund that tracks major U.S. oil producers, has dropped 72% over the past two years. The VanEck Vectors Oil Services ETF (OIH), which tracks major oil services companies, has fallen 57% since 2014. Oil services companies sell “picks and shovels” to oil producers. However, oil stocks have showed signs of bottoming out in the past few months. XOP is up 57% since January, while OIH is up 45% in the same period.

Oil companies have cut spending to the bone..…
They’ve abandoned ambitious projects. They’ve cut back on buying new machinery and equipment. Some have even stopped paying dividendsFor many companies, spending less wasn’t enough. Global oil companies have laid off more than 250,000 workers since 2014. Companies have also sold parts of their business to raise cash.

In March, Royal Dutch Shell (RDS.A) announced plans to sell $30 billion worth of assets. Shell is the third biggest oil company on the planet. According to Oilprice, Shell’s huge sale could include oil pipelines in the United States. In April, Marathon Oil (MRO), one of the largest U.S. shale oil producers, said it plans to sell about $1 billion worth of assets. Both companies have no choice but to get leaner. Shell’s profits plummeted 80% last year. Marathon lost $2.2 billion in 2015. It was the biggest annual loss in the company’s history.

Many companies have sold oil assets in North Dakota..…
As you may know, North Dakota was ground zero of America’s shale oil boom. From 2009 to 2014, the state’s oil production surged 554%. It became the country’s second biggest oil producing state after Texas.
North Dakota’s booming oil economy attracted more than 80,000 workers. It became the fastest-growing state in the country. Then, oil prices plunged.

North Dakota’s oil production has fallen 10% over the last 18 months..…
And it’s likely to keep falling. According to The Wall Street Journal, more than 2,000 oil wells in North Dakota haven’t pumped a drop of oil in over a year. That’s the highest number of idle wells in over a decade. Many oil companies in North Dakota are burning through cash right now. They’re under distress, and they’re selling assets at deep discounts to pay the bills.

Last week, The Wall Street Journal reported that this has attracted opportunistic investors:
The vultures are descending on North Dakota…
Hundreds of wells have changed hands or are in the process of being sold, state figures show, to a grab bag of fortune seekers ranging from industry experts to first-time wildcatters. They are picking up properties as more established producers scale back or shed assets to pay creditors.
According to The Wall Street Journal, some of these opportunistic investors are Wall Street veterans:
Houston-based Lime Rock Resources, founded by a former Goldman Sachs Group Inc. banker and an oil-industry veteran, bought more than 340 North Dakota wells from Occidental Petroleum Corp. in November. The firm says it has at least $1.6 billion in private-equity money to invest, a portion of which it has spent on the Bakken. In another pairing of Wall Street and oil-patch veterans, NP Resources LLC bought 53 wells from Whiting Petroleum Corp. in December and is looking for more Bakken acreage.
This is a prime example of "crisis investing." Regular readers are familiar with this strategy. As you’ve probably heard us say, crisis investing is one of the world’s most powerful wealth building secrets. In short, crisis investing involves going against the crowd to buy beaten down assets that have been left for dead. You can often use this strategy to buy a dollar’s worth of assets for pennies. The good news is that you don’t need to step foot in North Dakota to crisis invest in the oil market. Anyone with a brokerage account can turn the oil crash into a money making opportunity.

As we said earlier, many oil stocks are showing signs of bottoming..…
Lots of big oil companies, like Devon Energy Corporation (DVN) and Continental Resources, Inc (CLR), are up 50% or more off their lows. That’s because oil prices have jumped 89% since January. Last week, oil prices closed above $50 for the first time since July. These big swings are typical for oil. Like most commodities, oil is cyclical, meaning it goes through big booms and busts.

It’s impossible to know for sure if oil prices have bottomed. Time will tell if oil’s recent jump is the start of new bull market. But we do know that many oil stocks are trading at their best prices in years. And because the world still runs on oil, it’s smart to go “bargain hunting” for great oil stocks today.

If you're buying oil stocks, stick to the elite companies..…
We look for a companies that can 1) make money at low oil prices. We also like companies with 2) healthy margins 3) plenty of cash and 4) little debt. In March, Nick Giambruno, editor of Crisis Investing, recommended an oil company that checks all of these boxes. It has a rock solid balance sheet…some of the industry’s highest profit margins…and “trophy assets” in America’s richest oil fields. Most importantly, it can make money at as low as $35 oil.

Like the “vultures” that descended on North Dakota, Nick used the oil meltdown as an opportunity to buy this world class oil company at a huge discount. He bought the stock just weeks after it hit a three year low. Since then, the stock has gained 10%. But Nick says it could go much higher. After all, it’s still down 30% since June 2014. You can access the name of this stock with a subscription to Crisis Investing, which you can learn more about right here.

By clicking this link, you’ll also hear about the biggest crisis on Nick’s radar. Every American needs to prepare for this coming crisis. By the end of this video, you’ll know how to protect yourself AND make money in its aftermath. Click here to watch this free video.

Chart of the Day

The oil surplus is shrinking..…
Today’s chart shows the price of oil going back to the start of 2014. As we said earlier, the price of oil has nearly doubled since January. But you can see that it’s still about half of what it was two years ago.
Oil prices are still low for a couple reasons. One, the global economy is slowing. As Dispatch readers know, the U.S., Europe, Japan, and China are all growing at their slowest rates in decades.

Secondly, the world still has too much oil. According to the Financial Times, oil companies are producing 800,000 more barrels of oil a day than the world consumes. In February, the global surplus stood at about 1.5 million barrels a day. The surplus has come down because oil companies are pumping less oil. But that’s not the only reason the global oil surplus has shrunk. On Monday, Bloomberg Business said the industry has also been hit by major “disruptions”:
Outages also have taken their toll on supply, with global disruptions reaching an average 3.6 million barrels a day last month, the most since the Energy Information Administration began tracking them in 2011. Fires that began early May in Alberta took out an average 800,000 barrels of Canadian supply last month, while Nigerian crude output dropped to the lowest in 27 years as militants increased attacks on pipelines in the Niger River delta.



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Thursday, August 1, 2013

Shell profit plunges after $2.2B charge on North American shale assets

Royal Dutch Shell’s [RDS.A] second quarter 2013 earnings, on a current cost of supplies (CCS) basis (see Note 1), were $2.4 billion compared with $6.0 billion in the same quarter a year ago. Second quarter 2013 earnings included an identified net charge of $2.2 billion after tax, mainly reflecting impairments (see page 6).

Second quarter 2013 CCS earnings excluding identified items (see page 6), were $4.6 billion and included a combined negative impact of $0.7 billion after tax related to the impact of the weakening Australian dollar on a deferred tax liability and the impact of the deteriorating operating environment in Nigeria. Compared to the second quarter 2012, CCS earnings excluding identified items were also impacted by higher operating expenses and depreciation as well as increased exploration well write-offs. Second quarter 2012 CCS earnings excluding identified items were $5.7 billion.

Basic CCS earnings per share excluding identified items decreased by 21% versus the same quarter a year ago.

Cash flow from operating activities for the second quarter 2013 was $12.4 billion, compared with $13.3 billion in the same quarter last year. Excluding working capital movements, cash flow from operating activities for the second quarter 2013 was $8.4 billion, compared with $9.5 billion in the second quarter 2012.

Capital investment for the second quarter 2013 was $11.3 billion. Net capital investment (see Note 1) for the quarter was $10.9 billion.

Total dividends distributed in the quarter were $2.8 billion, of which some $0.8 billion were settled under the Scrip Dividend Programme. During the second quarter some 56.2 million shares were bought back for cancellation for a consideration of $1.9 billion.

Gearing at the end of the second quarter 2013 was 10.3% (see Note 2).

A second quarter 2013 dividend has been announced of $0.45 per ordinary share and $0.90 per American Depositary Share (“ADS”), an increase of 5% compared with the second quarter 2012.

Read the entire Royal Dutch Shell earnings report


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Thursday, May 2, 2013

Earnings season continues.....Royal Dutch Shell [RDS.A], Statoil [STO] and Plains Exploration [PXP]

Royal Dutch Shell [RDS.A] Chief Executive Officer Peter Voser commented: “Our industry continues to see significant energy price volatility as a result of economic and political developments. Oil prices have fallen recently but Shell is implementing a long term, competitive and innovative strategy against this volatile backdrop.”

“Shell's underlying CCS earnings were $7.5 billion for the quarter, a 2% increase in CCS earnings per share from the first quarter of 2012. These results were underpinned by Shell's growth projects, an improvement in downstream profitability, and were delivered despite a difficult security environment in Nigeria.”

“Our profits pay for Shell's dividends and investment in new projects to ensure affordable and reliable energy supplies for our customers, and to add value for our shareholders.”

“Shell is investing for profitable growth, whilst maintaining strong capital discipline. We are developing some 30 new projects and maturing a series of further opportunities for investment. So far this year, we’ve seen the growth impact of recent start ups and we took four final investment decisions in petrochemicals, deepwater, and LNG”......Read the entire Shell earnings report.


Statoil [STO] president and CEO Helge Lundfirst announced 1st quarter 2013 net operating income was NOK 38.0 billion. Adjusted earnings were NOK 42.4 billion. "We deliver financial results impacted by lower production and reduced prices. We continue to deliver good industrial progress according to plan. As previously announced, production in 2013 will be lower than in 2012. We are on track to deliver 2 to 3% average annual production growth from 2012 to 2016 and production above 2.5 million barrels of oil equivalent per day in 2020," says Helge Lund, Statoil's president and CEO.

In addition to the expected lower production in the quarter, production was impacted by operational disruptions at Snøhvit, Troll and Peregrino. Statoil's net operating income was also impacted by a provision related to the Cove Point terminal in the US. Adjusted earnings [5] were down 28% compared to the first quarter 2012. The underlying cost development in the period is stable.

Statoil's cash flows provided by operating activities decreased by 19% compared to the first quarter of 2012, explained by the lower production and reduced prices......Read the entire Statoil earnings report.


Plains Exploration & Production Company (PXP) announces 2013 first-quarter financial and operating results. PXP reported first-quarter revenues of $1.2 billion and net income attributable to common stockholders of $22.6 million, or $0.17 per diluted share, compared to revenues of $524.3 million and a net loss attributable to common stockholders of $82.3 million, or $0.64 per diluted share, for the first-quarter of 2012.

The first quarter 2013 net income attributable to common stockholders includes certain items affecting the comparability of operating results. Those items consist of realized and unrealized gains and losses on our mark to market derivative contracts resulting in a net loss of $202.0 million due in large part to higher crude oil forward prices, a $15.5 million unrealized gain on investment in McMoRan Exploration Co. common stock, debt extinguishment costs of $18.1 million, and other items. When considering these items, PXP reports adjusted net income attributable to common stockholders of $139.6 million, or $1.05 per diluted share (a non-GAAP measure), compared to $77.0 million, or $0.58 per diluted share, for the same period in 2012.

A reconciliation of non GAAP financial measures used in this release to comparable GAAP financial measures is included with the financial tables. PXP's 2013 first-quarter daily sales volumes averaged 170.4 thousand BOE per day compared to 87.9 thousand BOE in the first quarter of 2012......Read the entire Plains Exploration earnings report.


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Wednesday, April 10, 2013

ConocoPhillips Suspends 2014 Alaska Drilling Plans

ConocoPhillips [COP] will place on hold its 2014 drilling plans for Alaska's Chukchi Sea due to the uncertainties of evolving federal regulatory requirements and operational permitting standards.

While the company is confident in its expertise and ability to safely conduct offshore Arctic operations, ConocoPhillips believes it needs more time to ensure that all regulatory stakeholders are aligned, said ConocoPhillips Alaska President Trond-Erik Johansen in a statement.

"We welcome the opportunity to work with the federal government and other leaseholders to further define and clarify the requirements for drilling offshore Alaska," Johansen commented. "Once those requirements are understood, we will reevaluate our Chukchi Sea drilling plans. We believe this is a reasonable and responsible approach given the huge investments required to operate offshore in the Arctic."

ConocoPhillips in 1998 was awarded 98 exploration lease tracts in the Chukchi Sea Outer Continental Shelf. The company is Alaska's largest oil producer and is operator of the Kuparuk and Alpine fields. ConocoPhillips' leases will expire in 2019. As of year end 2012, the company had invested $650 million net in its Chukchi Sea operations, including leases, seismic, biological studies and well planning, a ConocoPhillips spokesperson told Rigzone in an email.

Royal Dutch Shell plc in February suspended its 2014 offshore Alaska drilling plans, saying it needed more time to ensure the readiness of its equipment and employees for future drilling.

Last month, the U.S. Department of the Interior (DOI) concluded that Shell failed to finalize key components of its 2012 Alaska Arctic drilling program. DOI called on the industry and government to collaborate to develop an Arctic specific model for offshore Alaska oil and gas exploration.

DOI Secretary Ken Salazar said the agency would proceed with ConocoPhillips using the same regime it did with Shell. While the Obama administration is interested in pursuing Arctic resources, Salazar said they wouldn't allow shortcuts in terms of requirements, and that exploration would only be carried out with the "utmost safety."

Greenpeace International called decisions by ConocoPhillips and Norway-based Statoil ASA to shelve Arctic drilling plans on admission that the oil industry is still not capable of meeting the enormous challenges posed by operating in the world's most extreme environment.

"The time has come for governments around the world to call for a permanent halt to the reckless exploitation of the far north," said Greenpeace International Arctic campaigner Ben Wycliffe in a statement.

Posted courtesy of the staff at Rigzone


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Tuesday, April 24, 2012

Shell to Announce First Quarter Results

On Thursday 26 April at 2 o'clock est Royal Dutch Shell plc will release its first quarter results and first quarter interim dividend announcement for 2012.
These announcements will be available on http://www.shell.com/investor.

Webcasts

Simon Henry, Chief Financial Officer, will host two live webcasts of the first quarter results and first quarter interim dividend announcement for 2012 on Thursday April 26, 2012.

Get your Free Trend Analysis for RDS.A, Royal Dutch Shell

Tuesday, September 13, 2011

Rigzone: Iraq Energy Panel Approves Gas Deal

A top Iraqi government energy committee has approved a deal with Royal Dutch Shell PLC (RDSA) to capture and exploit gas from its giant southern oil fields, the country's oil minister said Sunday.

The Iraqi oil ministry struck a deal in July with Shell and Japan's Mitsubishi Corp. (8058.TO, MSBHY) to develop gas production in southern Iraq. To become valid the deal needs approval from the Baghdad government.

"It was agreed upon by the energy committee and was sent to the cabinet for approval," Abdul Kareem Luaiby told Dow Jones Newswires on the sidelines of an Iraqi energy meeting in Amman, Jordan. The committee is chaired by the deputy prime minister for energy affairs, Hussein al-Shahristani, and its members include the ministers of oil, electricity and finance.

Luaiby declined to say when exactly the cabinet would approve the deal. The agreement must first be examined by the cabinet's legal and specialized offices, he said......Read the entire article.

Thursday, July 16, 2009

Profits For Oil Industry Expected to Fall Sharply

For the second straight quarter, Exxon Mobil, Royal Dutch Shell and most of the world’s largest oil companies are poised to report quarterly earnings that pale in comparison to a year ago, when results were buoyed by crude prices that topped out near $150 a barrel. The April-June results may be somewhat better than first quarter earnings, which were the lowest in several years, but declines of 50 percent or more from a year ago are likely to be the norm. That’s what happens when oil prices plunge more than 60 percent.....Complete Story


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Jordan Parliament Approves Shell Oil Exploration Deal


The Jordanian Parliament has approved a multibillion-dollar concession agreement with Royal Dutch Shell PLC to explore oil from Jordan's vast oil shale resources, a source at the country's Natural Resources Authority said Thursday. "The council of deputies has ratified the agreement during a session held Wednesday," the source told Dow Jones Newswires. Shell is expected to spend around $500 million on exploration, assessment and designs on the project.....Complete Story

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Tuesday, July 14, 2009

Shell Set to Open First Cluster of Hydrogen Filling Stations


Shell today opens its second hydrogen filling station in the greater New York City area. With a third due to open in the area later this month and one already operating there for more than a year, this is Shell’s first cluster of hydrogen filling stations.
The station opening today, at JFK international airport, is the result of a partnership between Shell, the Port Authority of New York and New Jersey, the US Department of Energy and General Motors. A third station in the Bronx, due to open late in July, has been developed.....Complete Story

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Monday, June 29, 2009

Oil Settles Above $71, China to Boost Reserves

Oil prices settled above $71 a barrel Monday, as China said it would boost oil reserves and Nigerian militants partly shut down an offshore oil platform belonging to Royal Dutch Shell PLC. Benchmark crude for August delivery gained $2.33 to settle at $71.49 a barrel on the New York Mercantile Exchange. Alaron Trading Corp. analyst Phil Flynn said China's plans to increase its strategic crude oil reserves by 60 percent should provide the market with some long term support.....Complete Story

Oil, Gasoline Rise as Nigerian Militants Attack Shell Field


Crude oil and gasoline rose after an attack by Nigerian militants shut a field operated by Royal Dutch Shell Plc, cutting output from Africa’s largest producer. Shell said it closed the Estuary field near the Forcados export terminal after the assaults. Hostilities in the Niger River delta have cut more than 20 percent of the country’s oil exports since 2006. The International Energy Agency, an adviser to 28 developed nations, lowered its five-year forecast.....Complete Story

Saturday, June 27, 2009

Russia to Cooperate With Shell on Sakhalin 3 and 4

Russia is prepared to cooperate with Royal Dutch Shell Plc, Europe’s largest oil producer, on oil and gas projects in the Russian Far East known as Sakhalin-3 and Sakhalin-4, Russian Prime Minister Vladimir Putin said. Putin, speaking at his residence in Novo-Ogaryovo, outside Moscow, met with Shell Chief Executive Officer Jeroen van der Veer, and Peter Voser, who will become the next chief executive. Now is an “ideal time” to move quickly.....Complete Story

Wednesday, February 25, 2009

Executives Press Congress On Offshore Drilling, Russia Near Deal In Nigeria


"Oil Executives Ask Congress Not to Delay Offshore Drilling"
Top executives at Devon Energy and Shell said Tuesday they will ask Congress not to stall the opening of new offshore drilling areas that can provide the U.S. with a reliable source of energy and jobs....Complete Story

"Gazprom Sees $2.5B Nigeria Deal Sealed in March"
Russia's Gazprom hopes to conclude a $2.5 billion oil and gas exploration deal with Nigeria by the end of March, establishing a 50/50 joint venture with state oil firm NNPC....Complete Story

"Oil Rises for Second Day After Report Shows Decline in Gasoline Supplies"
Crude oil rose to a three week high after a government report showed that U.S. gasoline inventories fell as refineries cut operating rates and demand strengthened....Complete story

"Gasoline Futures in New York Extend Gains as Report Shows Inventories Fell" Gasoline futures advanced after the Energy Department reported supplies fell the most in five months, refiners cut production and drivers bought more motor fuel...Complete story

Thursday, January 29, 2009

Crude Oil Industry Headline News


"Shell Remains Bullish on Long-Term Energy Prices"
Royal Dutch Shell Plc expects energy to be expensive in the long term as the world tries to meet growing demand without harming the environment, its chief executive said on Thursday....Complete Story

"OPEC Ready for Further Output Cut"
The Organization of Petroleum Exporting Countries (OPEC) stands ready to make further cuts in oil supply if prices remain subdued, the cartel's secretary general said Thursday....Complete Story

"Shell to Boost Investment Despite Oil Drop"
Oil major Royal Dutch Shell Plc plans to buck an industry-wide trend of investment cuts on the back of a $100/barrel drop in crude prices and lift its capital expenditure....Complete Story

Tuesday, January 27, 2009

Crude Oil Industry Headline News


"Crude Oil Futures Decline on Speculation That U.S. Recession is Deepening"
Crude oil fell the most in two weeks after a report that U.S. home prices tumbled, a sign that the recession in the biggest energy-consuming country is deepening....Complete Story

"Shell Unloads Oil Cargo, Phibro Tanker Lifts Anchor as Contango Disappears"
Royal Dutch Shell Plc sold a cargo of crude stored off the U.K. and a vessel hired by Citigroup Inc.’s Phibro LLC left its anchorage in Scotland for the U.S. as the incentive to keep oil in tankers disappears....Complete Story

"Baker Hughes Will Cut 1,500 Jobs, Including 200 in Houston"
Baker Hughes has begun laying off nearly 4% of its global work force, including some employees in Houston, making it the latest major oil field services company to announce cuts in response to building industry headwinds....Complete Story
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