Royal Dutch Shell - Expert Analysis

Royal Dutch Shell Plc Visit Company Website The Shell Group (The Group) is a global group of energy and petrochemical companies with around 101,000 employees. The Group's businesses include oil and gas exploration and production, LNG, power generation, manufacturing, marketing and shipping of oil products and … read more

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Expert Analysis

The Energy Report Interview with Fadel Gheit (3/20/12) "If new technology and catalysts can be developed and improved, I think gas-to-liquid is a very strong possibility. Royal Dutch Shell Plc has completed the largest gas-to-liquid facility in Qatar. It is a very expensive but improved technology; efficiency and catalysts can bring this cost down. At $100/bbl for oil, I think gas for transportation may be competitive if we can reduce capital costs. . .many companies, especially Shell, have a very large number of projects spread over the next three or four years. These are multibillion-dollar projects that have been in the works for many years but have not yet contributed production, cash flow or earnings. However, once they hit their stride, these projects will boost cash flow by almost 50%. At that point, the company and shareholders are basically collecting the fruit." More >

Standard and Poors (3/10/12) "We see production rising at Royal Dutch Shell Plc over the next four years, growing 12% in that span. . .in 2012, Shell is expected to double liquid natural gas capacity through Qatar and Russia and expand its Canadian oil sands production 65% while fully integrating it into its U.S. downstream operations. Shell will look to expand its gas-to-liquids (GTL) markets (particularly in China). . .in our view, size, diversification, strong returns and technical strength are core advantages that, coupled with future reserve additions from Canadian oil sands, its GTL project in Qatar and its Marcellus gas position, will ensure successful reserve replacement long term."

Jon Rigby, UBS Securities (2/23/12) "Royal Dutch Shell Plc Shell announced a proposed offer of 195p/share in cash for Cove Energy; the offer values Cove at ~£992.4M ($1.57B) and represents a premium of 28.5% to the average closing price over the five business days ending on Feb. 21, 2012. The offer is conditional on Mozambique approvals. . .Shell also brings unrivalled LNG development skills, valuable to other partners and the country. . .this potential acquisition fits in well with Shell's leading position in the global LNG market and its skill set."

Mark Gilman, Benchmark (2/23/12) "We believe that Royal Dutch Shell Plc's proposed $1.45B cash acquisition of Cove Energy represents a strategically appropriate transaction. . . the company's estimated entry price of approximately $1/risked Mcf is reasonable, with potential returns likely to range from 10–12% under our assumed $6/Mcf. . .although not a large deal, from Royal Dutch Shell's perspective, it affords the company a sizeable, early-entry acreage position in the emerging, and potentially prolific, offshore East African Rovuma natural gas basin."

Jason Kenney, ING Securities (2/8/12) "Royal Dutch Shell Plc sees a 30–50% uplift for net operating cash flow 2012–2015E vs. 2008–2011 (under US$80–100/bbl oil prices). . .we like the company's focus on technological differentiation in the oil/gas and energy sector, its commercial capability, portfolio diversity and project delivery skill. It is essentially a steady growth, capitally efficient cash generator offering attractive (and dependable) cash returns supported by a strong and flexible balance sheet and an active mergers and acquisitions strategy."