The Energy Report - Outlook for Shell Remains Upbeat

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Outlook for Shell Remains Upbeat

DAVID HART, Westhouse Securities Limited (04/28/2010)
"Shell has announced first-quarter results, which were ahead of market expectations. Highlights included:

Oil and gas production was 3,594 thousand boe/d, 6% higher than last year's first quarter. Driving the increase was a 12% rise in natural gas production.
Earnings, on a current-cost-of-supplies basis, were $4.9bn [vs.] $3.3bn last year—a 49% increase.
Cash flow from operating activities was $4.8bn, down from $7.6bn in 2009 due primarily to increases in working capital.
Net capital investment for the quarter was $6.2bn.
Gearing at the end of the quarter was 17.1%, up significantly from 6.6% last year.
The quarterly dividend was left unchanged at $0.42 per ordinary share.

. . .Shell produced a strong first-quarter performance that benefited from robust upstream activities. Initiatives to reduce costs remain ongoing, as do efforts to refocus refining and retail operations. With several major projects in the pipeline, the outlook for Shell remains upbeat. We maintain our BUY recommendation."

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