Shell's Earnings Per Share Increase 15% in Q1
Royal Dutch Shell's first quarter 2008 earnings, on a current cost of supplies (CCS) basis, were $7.8 billion compared to $6.9 billion a year ago. Basic CCS earnings per share increased by 15% versus the same quarter a year ago.
A first quarter 2008 dividend has been announced of $0.40 per share, an increase of 11% over the US dollar dividend for the same period in 2007.
$1.1 billion or 0.5% of Royal Dutch Shell issued ordinary shares were bought back for cancellation during the quarter.
Royal Dutch Shell Chief Executive Jeroen van der Veer commented, "Good operating performance, combined with increased oil and gas prices, offset the impact of downstream conditions in the first quarter 2008. We have delivered another competitive set of earnings for Shell's shareholders. Shell has the largest capital spending programme in our industry today, to grow the company and play our part in ensuring that energy markets remain well supplied. Our strategy is on track."
First quarter Exploration & Production segment earnings were $5,143 million compared to $3,393 million a year ago. Earnings included a net charge of $66 million related to identified items, compared to a net gain of $104 million in the first quarter 2007.
Earnings, when compared to the first quarter 2007, reflected higher gas production volumes and the benefit of higher oil and gas prices on revenues, which were partly offset by lower oil production volumes mainly in the USA and Europe and by higher exploration expenses.
Global liquids realisations were 66% higher than in the first quarter 2007, following marker crudes Brent and WTI increases of 67% and 69% respectively. Global gas realisations were 25% higher than a year ago. Outside the USA gas realisations increased by 24% whereas in the USA gas realisations increased by 32%.
First quarter 2008 production (excluding oil sands bitumen production) was 3,438 thousand barrels of oil equivalent per day (boe/d) compared to 3,413 thousand boe/d a year ago. Crude oil production was down 6% and natural gas production was up 9% compared to the first quarter 2007.
Production compared to the first quarter 2007 included additional volumes principally from Ormen Lange (Shell share 17%) in Norway, West Salym (Shell share 50%) in Russia, Changbei (Shell share 50%) in China, Deimos (Shell share 71.5%) in the USA, Stybarrow (indirect Shell share 17.1%) in Australia, Chipmunk, Cliffdale and Orion (Shell share 100%) in Canada and Starling (Shell share 28%) in the United Kingdom.
First quarter Oil Sands segment earnings were $249 million compared to $115 million in the same quarter last year.
Earnings, when compared to the first quarter 2007, reflected the impact of higher oil prices on revenues and a refund of royalty charges, which were partly offset by lower production volumes and higher costs.
The royalty calculation methodology applicable to the Athabasca Oil Sands Project (AOSP) was revised during the quarter, allowing the inclusion of additional eligible costs to the project. Due to this revision the project cost payout timeframe for royalty calculation purposes was extended beyond July 2007 when payout of the project was initially achieved. The royalty rate for the project was revised back to 1% (from 25% since July 2007) until achievement of the project cost payout. As a consequence, the adjustment related to prior quarters' bitumen production had an impact of 12 thousand barrels per day on the first quarter 2008.
Bitumen production decreased by 13% compared to the same quarter last year. Excluding the effect of the royalty revision, net production decreased by 25% due to operational issues at the mine related to extreme cold weather conditions and unplanned maintenance at the Scotford Upgrader. Upgrader availability increased to 94% compared to 93% in the first quarter 2007.
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