Page 11 - Euroil Week 05 2020

EurOil PERFORMANCE EurOil
Shell profits tank in Q4
UK
All eyes will be on the oil major’s buyback programme.
PROFITS at Royal Dutch Shell slumped 48% year on year, landing at their lowest level in over three years as a result of weaker oil and gas prices.
Net income attributable to shareholders, based on a current cost of supplies (CCS) and excluding identi ed items, totalled $2.93bn in the three-month period, down from $5.69bn a year earlier and $4.8bn in the third quarter. Full- year income was also down 23% at $16.46bn.
Many other majors have reported diminished earnings for the fourth quarter, a er conditions on the oil and gas market grew steadily more bearish over the last year. Shares in Shell were down 4% a er the results were announced.
“ e strength of Shell’s strategy and portfolio has enabled delivery of competitive cash ow performance in 2019 despite challenging macro- economic conditions in re ning and chemicals, aswellasloweroilandgasprices,”CEOBenvan Beurden said in a statement.
He pointed to Shell’s $47bn in cash flow from operations and its $25bn in distributed
dividends as cause for optimism.
Shell already warned ahead of the results that
it would book a $1.6bn impairment on its uncon- ventional gas assets in the US, as well as a num- ber of other charges across its business.
Van Beurden said the company’s intention to complete its $25bn share buyback programme in 2020 remained “unchanged.” It has bought back almost $15bn of stock so far.
“Shell missed even drastically lowered expec- tations, with consensus having fallen 32% since its December trading statement,” Redburn ana- lyst Stuart Joyner said in a note, adding that all eyes would be on the buyback programme.
“It now looks extremely challenging to com- plete the buyback programme by the end of year as planned, and the company has acknowledged that if macroeconomic conditions remain at cur- rentlevelsitislikelytospilloverto2021.”
Shell announced a fourth-quarter dividend of $0.47 per share, unchanged from a year earlier, meaning a total payout of $3.7bn.™
PROJECTS & COMPANIES
Serica closes North Sea fields for two months of repairs
UK
Serica needs to deliver its shareholders a return on the acquisition of stakes in three North Sea elds.
THE UK’s Serica Energy has been forced to shut down the Bruce, Keith and Rhum gas elds for two months after discovering that an under- water structure at one of its platforms had been damaged.
e lengthy downtime comes at a critical time for Serica, which needs to deliver its shareholders a return on the acquisition of stakes in the three North Sea elds in late 2018.
In a statement on January 30, the Lon- don-listed rm said an inspection had found that an unused seawater return caisson at the Bruce platform had parted below the waterline. ere are no wider structural concerns and workers do not need to be evacuated, it said. But although both the upper and lower sections of the caisson are intact, work is being carried out to ensure it is “properly secured.”
This work is expected to take around two months, Serica said, during which time produc- tion from Bruce as well as the Keith and Rhum elds will be halted.
“Although this is a frustrating event, our skilled offshore team have reacted
very efficiently,” company CEO Mitch Flegg commented. “The underwater investigation quickly determined the cause of the problem and a solution is being planned to allow the resumption of full production.”
Serica acquired a 98% stake in Bruce, a 100% share of Keith and a 50% interest in Rhum through a series of deals with BHP Billiton, BP, France’s Total and Japan’s Marubeni in Novem- ber 2018. Before the deals, its only asset was a non-operated stake in the North Sea’s Erskine eld.
The company produced 30,000 barrels of oil equivalent per day (boepd) at Bruce, Keith, Rhum and Erskine last year, marking a 13% increase year on year. It is targeting further growth this year, with the launch of a new well at Rhum.
Serica said the nancial impact of the disrup- tion would be mitigated by cash ow arrange- ments agreed with the previous owners of its shares in the elds. Operations at Erskine eld are una ected. ™
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