Shell is struggling to capture investors’ imagination following a series of disappointments. Missed production targets have undermined confidence in the company’s ability to deliver growth.
Posted by John Donovan
Extract in red text below from page 2 of a 30 page Wood MackenzieExecutive Summary of Shell dated November 2013. Hence this is a bang up to date expert assessment. It was kindly supplied by an unsurprised Shell insider source, who says the report is in line with the familiar story at Royal Dutch Shell of Over-promise and Under-delivery.
Extracts
- Shell is struggling to capture investors’ imagination following a series of disappointments.
- Missed production targets have undermined confidence in the company’s ability to deliver growth.
- Exploration in recent years and unconventionals have failed to live up to expectations.
- Concerns have also grown that instead of improving distributions, cash flows are being reinvested in the next investment cycle.
- Shareholder returns now lag behind ExxonMobil, Chevron and BP.
- This translates into one of the most discounted ratings in the sector.
- Shell is also under pressure to get back on the front foot in exploration.
- The new leadership will face some difficult choices in order to drive a re-rating of the stock.
- Shell made a return of just 10% on its exploration investment between 2008 and 2012, dragged down by high spending and a poor performance in unconventionals.
- Despite investing significant capital in unconventional oil and gas, Shell has lost ground to its peers.
Extracts end
The TRUTH will set you FREE.
