Sudden exit of Shell executive director linked to profit warning?
Speculation from a usually well-informed source…
Can’t help but wonder whether *Rees’ departure just days ago was because he refused to sign off on the accounts?
Bad as they were, it’s possible that the accounts would have been far worse if they had reflected the true state of affairs.
* Sudden departure of Shell global legal boss Peter Rees QC
What The Hell, Shell? Oil Giant Warns On Disastrous Quarter
Royal Dutch Shell released a dreadful profit warning today. …a few more quarters like this one and the pressure will mount on CEO van Beurden to start slashing that capex and put Shell into a managed shrink-down like CEO Robert Dudley has been forced to do at BP. Earlier this week The Financial Times reported that Shell plans to divest some $15 billion worth of assets over the next two years. The magnitude of Shell’s shortcoming caught even the sharpest pencils off guard. “We’re a bit shell-shocked this morning after this profit warning… And we all remember its 2012 arctic drilling fiasco in Alaska. All told, mighty Shell is losing money on its oil and gas fields in the United States.
Christopher Helman, Forbes Staff: 1/17/2014 @ 9:46AM
Royal Dutch Shell released a dreadful profit warning today. Fourth quarter earnings are expected to come in at $2.2 billion, down from $7.3 billion a year ago. Full year earnings will be down almost 40% to $16.8 billion. Upstream earnings were off 45% year-over-year, while downstream refining earnings plunged 58%. Topping it off, in the past year Shell’s oil and gas volumes have slumped roughly 13% to 2.9 million barrels of oil (and natural gas equivalents) per day.
How could this happen at a time when oil prices have been hovering around $100 and demand for liquefied natural gas remains strong? Shell cited high maintenance expense, especially at its gas-to-liquids plant in Qatar. Deteriorating security in Nigeria also was a hit. Refining margins continued to be poor in Asia and Europe.
But perhaps the biggest single hit to earnings in the quarter was the $700 million asset impairment charge believed to be tied to Shell’s lackluster exploration venture in the Eagle Ford shale of Texas. In 2010 Shell leased a 100,000 acre ranch in south Texas from Houston oilman Dan Harrison, paying a bonus of $1 billion. Shell thought the land would help them play catch up in the prolific Eagle Ford shale. Yet after a few years of expensive drilling and fracking, Shell came to realize that that deal had been pretty much a dud. It’s also believed to have had lackluster results in the Mississippi Lime play of Kansas. And we all remember its 2012 arctic drilling fiasco in Alaska. All told, mighty Shell is losing money on its oil and gas fields in the United States.
The magnitude of Shell’s shortcoming caught even the sharpest pencils off guard. “We’re a bit shell-shocked this morning after this profit warning, which is highly unusual for an integrated oil company,” wrote Oswald Clint of Bernstein Research in a note this morning. A miss of his magnitude makes you wonder whether similar disappointments await investors in the likes of BP BP +1%, Chevron CVX +1.15%, ExxonMobil and Total TOT +0.24%. After all, Shell is not the only Big Oil playing catch up in shale plays and dealing with political uncertainty in Nigeria and elsewhere. For now, Clint thinks “this is much more Shell specific than a sector wide phenomenon.”
How will Shell turn it around? Figuring that out falls to new CEO Ben van Beurden. “Our 2013 performance was not what I expect from Shell,” he said today. “Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”
When it comes to capital spending, a little improvement will go a long way. In 2013 Shell generated $40.4 billion in cash flow, but used it all up, and then some, with a remarkable $44.3 billion worth of capital spending on new projects such as deepwater developments in the Gulf of Mexico and LNG in Australia. Will all that new investment help Shell find new profitability in the years to come? Investors sure hope so.
But a few more quarters like this one and the pressure will mount on CEO van Beurden to start slashing that capex and put Shell into a managed shrink-down like CEO Robert Dudley has been forced to do at BP. Earlier this week The Financial Times reported that Shell plans to divest some $15 billion worth of assets over the next two years. At some point it just makes more sense to milk old low-cost oil and gas fields for cash rather than quixotically attempt to replace those cheap old barrels of easy oil with tough, expensive new ones.
Shares in Shell’s ADRs were off 1.2% at the market open.
RELATED
Shell Warning Represents Rare Reputational Blow
It’s been 10 years since Royal Dutch Shell PLC issued a profits warning. Back then, it disclosed massive accounting discrepancies in its reserves.Today’s fourth quarter profit warning doesn’t carry any whiff of scandal, but represents a big and rare reputational blow to one of Europe’s most dependably-performing companies.
Still, the damage isn’t as bad as the last time the company issued a profit warning on Jan 9, 2004. On that day the company’s share price fell 7.4% following the disclosure of discrepancies in its oil reserves calculation that would lead to a major management and company restructuring and unfold into one of its biggest crisis in its century-plus of pumping oil.
(Seems that the WSJ may have visited our website earlier today)
Shell is not so much on fire as jumping off a burning platform
By Emma Haslett Friday, 17 January 2014
Shell issues shock profit warning
Shell is not so much on fire as jumping off a burning platform, after it admitted full-year profits are likely to be half what it expected.
Blimey: new Shell chief exec Ben van Beurden has barely had enough time to put the pictures up in his new office – but now he’s found himself hauled into the spotlight this morning, issuing a shock profit warning. Van Beurden seemed more surprised at what he was saying than anyone else.
New Shell boss spooks market with warning
By Kate Holton: LONDON
Shell warns of ‘significant’ profit miss
(Reuters) – Royal Dutch Shell (RDSa.L) issued a “significant” profit warning on Friday, detailing across-the-board problems and the extent of the challenges facing the oil major’s new boss Ben van Beurden, who took over two weeks ago.
The warning comes nearly *10 years to the day after Shell, the western world’s No. 3 oil company, revealed the so-called reserves accounting scandal, when the group dramatically downgraded its reserves estimates.
(*COMMENT BY JOHN DONOVAN: LOOKS LIKE REUTERS VISITED THIS WEBSITE EARLIER TODAY?)
Shell Profit Slumps
By Brian Swint and Eduard Gismatullin Friday January 17, 2014
Royal Dutch Shell Plc (RDSA) said profit plunged because of deteriorating refining markets and mounting losses in the Americas, surprising investors with an early earnings report that wiped out $10 billion in shareholder value.
“It’s a shock,” Jason Kenney, an analyst at Banco Santander SA in Edinburgh, said today by telephone. Shell had “to pre-announce to get the market to reality, but even so it’s a very weak set of results.”
Royal Dutch Shell issues shock profit warning
Shell dropped a bombshell on investors after warning that fourth quarter profit will be “significantly” lower than last year, blaming low production, high exploration costs and continuing problems with refining.
“It’s not good. When you’re talking about higher costs and lower production volumes, it’s a lethal combination,” said Nick Xanders, who heads European equity strategy at BTIG, the trading and brokerage firm.
Royal Dutch Shell Profits Slump Debacle
Based on our insider information, we, and only we, raised the question of whether Royal Dutch Shell CEO Peter Voser jumped ship or was pushed. I think we now have the answer that explains his unexpected early retirement under the cloak of a change of lifestyle. How do you know that Shell is run by clowns? The continued existence of this website over the last decade proves that this is the case. One miscalculation after the other.
By John Donovan
I would like to put a simple question to our visitors.
What news source has provided the most accurate assessment about Royal Dutch Shell Plc and the senior management?
Not the BBC, The Wall Street Journal, the Financial Times, The Guardian, The Telegraph, The Motley Fool or any other source. Certainly not shell.com.
The most accurate assessment and information has consistently emanated from this website.
Not because I am a financial genius (far from it) but solely due to the insider information that has proven to be so insightful and accurate.
I merely provide the platform.
Based on our insider information we, and only we, raised the question of whether Royal Dutch Shell CEO Peter Voser jumped ship or was pushed.
I think we now have the answer that explains his unexpected early retirement under the cloak of a change of lifestyle.
How do you know that Shell is run by clowns? The continued existence of this website over the last decade proves that this is the case. One miscalculation after the other. We even operate under the top level domain name that Shell failed to secure despite issuing proceedings against us and as a result process job applications and deal with other matters, including business proposals on behalf of Shell. Would you want your so called No1 enemy to be in that position? You could not make it up.
Now we will see if Big Ben van Beurden has any more gumption that his hopeless predecessors, Sir Philip Watts, Jeroen van der Veer and Peter Voser, all three, like the current CFO Simon Henry, tainted by financial scandal, but still allowed to remain at the helm of Shell for years. What a role call. Will Voser become a priest?
COMMENT RECEIVED
John
Shell has either learned or been told when they have to give a profit warning. Interestingly, after their adamant refusal to acknowledge the fact when Q2 results were issued, the market judgement for Q4 was a share decrease of only 3.3% compared with a decrease of 5.32% for Q2. Proof enough that they should also have issued profit warnings for Q2 and Q3?
Perhaps London Lad might like to comment on that or is his head well below the parapet?
Perhaps London Lad might like to comment on that or is his head well below the parapet?
RELATED COMMENT RECEIVED 2014/01/17 at 14:28 FROM KEITH RICHARDSON
Most of your contributors seem to have worked for Shell in the past. Seems to me that they were happy to take the money until they were released. Perhaps some unbiased contributors would be in a better position to discuss issues.
COMMENT ON SHELL BLOG BY “AN OLD EP HAND”
John, how often have our directors in the past claimed huge successes in times of high oilprice and then modestly (in small print and low voice) stated that whatever they do will only be visible some 10 years later?
In bad times they always reminded us in fat print and booming speeches that it was not their fault and inferred it was the result of bad decisions some 10 years earlier. But from now on things would be fine, we would change and all would be well and they could still claim huge bonusses.
But let’s check back, who were in charge some 10 years ago? YES: the bully astronaut who had seen the future and liked it and the brain with the beard who predicted Shell would be producing 6-6.5 million BOE in 2014. (I believe he is now trying to make the trains in the UK run on time.)
I guess there is no real chance they hand back there ill gotten bonusses? Or give these to charity?
It is clear your job is not finished!
Royal Dutch Shell issues profit warning
Oil giant Royal Dutch Shell has issued a profit warning after it made less money than expected in the final quarter of 2013. “Fourth-quarter 2013 figures… are expected to be significantly lower than recent levels of profitability,”; Shell’s shares fell more than 4% at the beginning of trading in London.
17 January 2014 Last updated at 08:26
Oil giant Royal Dutch Shell has issued a profit warning after it made less money than expected in the final quarter of 2013.
“Fourth-quarter 2013 figures… are expected to be significantly lower than recent levels of profitability,” the company said in a statement.
It now expects profits for the quarter to be about $2.2bn (£1.3bn) and profits for 2013 as a whole to be $16.8bn.
Shell’s shares fell more than 4% at the beginning of trading in London.
Profits for 2013 are expected to be down significantly on 2012, when it made $27.2bn.
“Our 2013 performance was not what I expect from Shell,” Shell chief executive Ben van Beurden said in a statement.
“Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.”
Mr van Beurden became chief executive at the beginning of this year, taking over from Peter Voser.
Shell said its profits in the fourth quarter were hurt by a range of factors, including higher exploration costs, security problems in oil-rich Nigeria, and maintenance work that hit oil and gas production.
It said the weakening of the Australian dollar also had an effect.
Expected profits of $2.2bn for the quarter include impairments of $700m. When these are discounted, the expected profits are $2.9bn.
ROYAL DUTCH SHELL PROFITS WARNING DEBACLE
Message from one of our sources…
John
How many warnings did we give about taking the financial hits in the final quarter before Voser left?
And yet the analysts are surprised!
(AND THIS MARKET SHOCKING NEWS ALMOST EXACTLY TO THE DAY, ON THE TENTH ANNIVERSARY OF WHEN NEWS FIRST BROKE OF THE ROYAL DUTCH SHELL RESERVES SCANDAL)
Shell warns of plunge in profits
Jan 17 2014
Shell (RDS.A) has warned that it expects its Q4 profit to be “significantly lower than recent levels of profitability,” with the company estimating that adjusted earnings on a current cost of supplies basis will plummet to $2.9B from $7.3B a year earlier. Consensus is for $4B.
Shell cited oil and gas prices, “weak industry conditions in downstream oil products, higher exploration expenses, and lower upstream volumes” as reasons for the drop in earnings.
Shell is due to publish its full results on January 30. (PR)
Oil giant Shell in surprise profit warning
Shell has seen 3.9% wiped off its share price since markets opened a few minutes ago.
Shell Q4 2013 profits £2.9bn against £4bn expectations
‘Not what I expect from Shell’ – chief executive Ben van Beurden
Jennifer Rankin: theguardian.com, Friday 17 January 2014 08.19 GMT
To start the day, we have a surprise profits warning from the world’s second largest oil company, Royal Dutch Shell. The company has said that its fourth quarter 2013 results are likely to be “significantly lower” than recent levels of profitability.
Earnings for the fourth quarter of 2013 are expected to be $2.9 billion (£1.8bn), compared to analysts’ expectations of $4bn.
Shell is blaming “weak industry conditions in downstream oil products, higher exploration expenses and lower upstream volumes”.
‘Not good enough’ is the message from Ben van Beurden, Shell’s chief executive who took over two weeks ago.
Our 2013 performance was not what I expect from Shell. Our focus will be on improving Shell’s financial results, achieving better capital efficiency and on continuing to strengthen our operational performance and project delivery.
Although analysts are expecting UK markets to open up, Shell is the largest company on the FTSE 100, so could weigh the rest down.
The TRUTH will set you FREE.
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