Nov. 11, 2014, 9:09 AM
- Royal Dutch Shell ([RDS.A]], RDS.B) says it plans to maintain its target to sell $15B of assets by 2015 in an effort to boost cash flow, and will maintain its current oil and gas exploration portfolio.
- Shell has sold $12B of assets YTD, putting it on track to hit the $15B target by the end of next year.
- "On Shell's portfolio, upstream chief Andrew Brown says "We test all our projects between $70-$110 a barrel... so this is business as usual in terms of evaluation of project robustness."
- RDS.A -1.1% premarket.
Nov. 7, 2014, 5:43 PM
- The LNG Canada consortium headed by Royal Dutch Shell (RDS.A, RDS.B) has started an environmental assessment review for a liquefied natural gas plant in Kitimat, British Columbia that could cost as much as $40B.
- The news follows recently announced terms detailing how much the province plans to tax LNG plants, which Shell apparently finds satisfactory.
- The proposed plant would be one of the lowest emitters of greenhouse gas among LNG facilities in the world because it would use natural gas turbines to liquefy the gas and electricity from BC Hydro, Shell said in the application.
Nov. 4, 2014, 8:59 AM
- Stocks in European energy companies are hit hard following Saudi Arabia's move yesterday to cut prices for crude sold in the U.S., sending oil prices tumbling.
- Seadrill (NYSE:SDRL) sank more than 6% to the bottom of the Stoxx Europe 600 index; BP, Royal Dutch Shell (RDS.A, RDS.B), Total (NYSE:TOT), Statoil (NYSE:STO), Tullow Oil (OTCPK:TUWLF, OTCPK:TUWOY) and BG Group (OTCPK:BRGXF, OTCQX:BRGYY) are all more than 2% lower.
- Oil prices are sharply lower again today, with Brent crude falling to four-year lows near $82/bbl and U.S. crude touching a session low of $75.84, its weakest since Oct. 2011.
Nov. 3, 2014, 11:52 AM
- Exxon Mobil (NYSE:XOM), Shell (RDS.A, RDS.B), Chevron (NYSE:CVX) and BP have lower profit margins than a decade ago, according to an analysis in a page one WSJ story, as the big oil stalwarts are shelving expansion plans and shedding operations.
- Combined, the four companies averaged a 26% profit margin on their oil and gas sales in the past 12 months vs. 35% a decade ago, according to the analysis.
- Shell said last week that its oil and gas production was lower than it was a decade ago and is likely to keep falling for the next two years; Exxon's output sank to a five-year low after the company disposed of less-profitable barrels in the Middle East.
- The companies’ sheer size has meant that only huge, complex and expensive projects are big enough to make a difference to the companies’ reserves and revenues; with oil prices now heading lower, such problems only look as though they’re going to get worse.
Oct. 31, 2014, 5:56 PM
- United Steelworkers leaders, representing employees at two-thirds of U.S. refineries, are "looking for a fight" as they prepare to negotiate the next three-year contract with refiners, says the USW international VP who manages the union’s oil sector.
- The USW is seeking a substantial increase in wages, stronger rules to prevent fatigue and measures to preserve the share of union workers rather than contract employees.
- During the last round in 2012, USW and Shell (RDS.A, RDS.B), which represented refiners, spent about a month in negotiations before agreeing to a national contract which was used as the foundation for forging refinery-by-refinery contracts with union locals.
- An S&P index of refiners - including Exxon (NYSE:XOM), Chevron (NYSE:CVX), Marathon Petroleum (NYSE:MPC) and Tesoro (NYSE:TSO) - has more than doubled since the beginning of 2012, and the unions want a piece of the pie.
Oct. 31, 2014, 11:59 AM
- British Columbia and Alberta are banding together to push the Canadian government to let energy investors deduct costs of building liquefied natural gas shipping terminals and oil sands processing plants at the same rate as manufacturers.
- LNG facilities are allowed depreciation rates of 8% while oil sands refineries and upgraders can apply a 25% rate, but manufacturers qualify for a 50% rate under a temporary policy introduced in 2007 that’s due to expire at the end of 2015.
- Reclassification would help level the playing field with other countries, according to the BC LNG Developers Alliance, a group representing companies including Shell (RDS.A, RDS.B), Chevron (NYSE:CVX), BG Group (OTCQX:BRGYY, OTCPK:BRGXF) and Petronas.
Oct. 30, 2014, 11:27 AM
- Royal Dutch Shell (RDS.A, RDS.B) management insists it will not act hastily in pulling back on investments amid falling crude oil prices, according to remarks made in today's earnings conference call.
- Shell CFO Simon Henry says Brent crude oil prices were ~$8 lower in Q3 than in the prior-year quarter - which squeezed revenues 7.4% lower Y/Y to $107.85B - and every $10 decrease in Brent oil prices would result in a $3.2B decrease in annual earnings.
- Shell produced 2.79M boe/day in Q3, down 4.8% Y/Y, but Henry says it is achieving better profit margins from that production than in the past (Q3 earnings).
- Recent exits from the Pinedale and Haynesville dry gas plays in the U.S. mark the end of the selloff from Shell's North American shale portfolio; the company will have exited assets that amount to the equivalent of 11% of its 2013 oil and gas production this year, Henry says.
Oct. 30, 2014, 8:58 AM
- Royal Dutch Shell (RDS.A, RDS.B) -0.9% premarket despite reporting higher Q3 earnings, with increases in both upstream and downstream, while sales fell 7% to $107.9B.
- In Shell's core E&P business, Q3 earnings rose 25% Y/Y despite lower oil prices, benefiting from new production starting up in high-margin areas including the Gulf of Mexico; Shell also said it had fewer writeoffs on dry holes than in the year-ago quarter.
- Q3 oil and gas production fell 5% Y/Y to 2.8M boe/day because of divestments, a license expiry in Abu Dhabi, and security impacts in Nigeria.
- Net capital investment in the quarter was $4.8B, vs. $9.4B for the same period a year ago.
- Shell also says Charles Holliday, former DuPont CEO and former Bank of America chairman, will succeed Jorma Ollila as chairman next year; Holliday has been a non-executive director at Shell since 2010 and will be the company’s first American chairman.
Oct. 29, 2014, 7:43 AM
- Shell Midstream Partners (NYSE:SHLX), the MLP formed by Royal Dutch Shell (RDS.A, RDS.B), raised $920M in its IPO priced in New York late Tuesday.
- SHLX sold 40M shares, pricing the offering at $23/share, which was above the expected $19-$21; proceeds could increase to $1.06B if an over-allotment of shares is fully exercised.
- The offering represents ~29% of the company’s capital; RDS will own the remaining limited partnership interest through subsidiaries.
- Earlier: Shell Midstream looks to be largest IPO in more than a decade
Oct. 28, 2014, 12:58 PM
- Shell Midstream Partners (Pending:SHLX) is set to become the largest MLP IPO in more than a decade, perhaps raising more than $750M.
- While there’s been an explosion of MLPs coming to market in recent years, the debut of Shell Midstream is generating more interest than usual because of the location of its assets, its strong balance sheet, and its potential for growth thanks to its big-name sponsor, Royal Dutch Shell (RDS.A, RDS.B).
- At the mid-range of its expected pricing of $19-$21, the 3.25% yield for Shell Midstream shares is the lowest of any MLP public offering on record, but investors appear little concerned with the low yield because of the high growth SHLX is expected to deliver.
- While the yield is low, money managers say in comparison to the partnership’s potential growth rate, SHLX is pricing at a slight discount to its fast-growth peers.
Oct. 28, 2014, 7:44 AM
- BP has been told by the Federal Trade Commission it is closing its investigation into anti-competitive practices in oil price reporting and assessment, the company says in its Q3 earnings report.
- European Commission officials in May 2013 raided the offices of BP, Shell (RDS.A, RDS.B) and Statoil (NYSE:STO) as part of a probe into suspected manipulation of oil and biofuel prices; related inquiries then were received from U.S. and other regulators.
- The other investigations appear to remain open, BP says.
- BP +0.5% premarket.
Oct. 27, 2014, 5:39 PM
- Royal Dutch Shell (RDS.A, RDS.B) is asking the Obama administration for five more years to explore for oil off Alaska’s coast, in effect extending the deadline to drill on its Beaufort and Chukchi leases, saying setbacks and legal delays may push the start of drilling past the 2017 expiration of some leases.
- Shell, which has spent eight years and $6B to explore in the Alaskan Arctic, said in a July letter to the Interior Department that prudent exploration before leases expire is now “severely challenged."
- Shell’s plans to drill in the Arctic were set back in late 2012 by mishaps involving a drilling rig and spill containment system, then the company halted maritime operations there to repair equipment and has not resumed.
- Leases issued by the U.S. government for the right to drill for oil in the Arctic expire in 10 years unless the holder can show significant progress toward development.
Oct. 22, 2014, 7:53 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it found a gas field under a layer of salt in deep water off the coast of Gabon, in a discovery which could help confirm hopes that parts of west Africa's geology are similar to Brazil's.
- The Leopard-1 well encountered a substantial gas column, with ~200 meters net gas pay in a pre-salt reservoir, and Shell now plans an appraisal program to further determine resource volumes.
- Shell is the operator of the well with a 75% interest, while Cnooc (NYSE:CEO) owns the remaining 25%.
Oct. 21, 2014, 5:25 PM
- The British Columbia government says it is reducing its proposed liquefied natural gas tax, essentially cutting it in half, to entice global energy companies to move forward with their projects in the province.
- B.C. also unveils a special credit that allows LNG companies to reduce their corporate tax rate, as an incentive for the companies to locate at least some of their offices in the province.
- The LNG tax has now been reduced to 3.5%, and would only move to 5% in 2037; while the B.C. government still stands to gain nearly $150M/year in LNG taxes for each plant, the full amount will not be collected until seven years after a plant begins operating.
- Shell-led (RDS.A, RDS.B) LNG Canada issued a statement that appeared supportive of the government tax structure, while Petronas-led Pacific Northwest LNG is more cautious in its reaction.
- The "flurry of LNG proposals this year from Washington D.C. has totally freaked out B.C. and got the wheel turning," Gregor Macdonald tweets.
- Earlier: B.C. to require world's lowest LNG emissions.
Oct. 21, 2014, 11:59 AM
- Royal Dutch Shell (RDS.A, RDS.B) says it has signed agreements to sell all the Nigerian oil assets it put up for sale last year, as it continues to reduce its exposure to the area amid violence and rampant oil theft.
- Shell says that, together with its partners Total (NYSE:TOT) and Eni (NYSE:E), it signed an agreement to sell OML 18 to a consortium led by Canadian oil and gas company Mart Resources (OTCPK:MAUXF); it has now made sale and purchase agreements for four oil blocks, and made an agreement for the Nembe Creek Trunk Line pipeline.
- Shell also reportedly has agreed to sell another productive Nigerian oil block, Oil Mining License 29, and an associated pipeline, to a local consortium.
Oct. 20, 2014, 6:56 PM
- British Columbia will require proponents of liquefied natural gas terminals to keep their carbon emissions at the lowest level in the world, not to exceed the equivalent of 0.16 metric ton of carbon dioxide per ton of LNG, the province's Environment Ministry says.
- The lower carbon stipulation for LNG plants would add to an existing levy on greenhouse gases in B.C., which has a target to reduce emissions by a third below 2007 levels by 2020.
- Legislation regarding an LNG-specific tax - long awaited by major players such as Petronas, Shell (RDS.A, RDS.B) and Chevron (NYSE:CVX), who are proposing as many as 18 projects to ship LNG from the province to meet Asian demand - is scheduled to be announced tomorrow.
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