Shell Sails into $7.9 Billion Profit in Second Quarter

Royal Dutch Shell’s second quarter 2008 earnings, on a current cost of supplies (CCS) basis, were $7.9 billion compared to $7.6 billion a year ago. Basic CCS earnings per share increased by 7% versus the same quarter a year ago. The company announced a second quarter 2008 dividend of $0.40 per share, an increase of 11% over the US dollar dividend for the same period in 2007.

Cash flow from operating activities for the second quarter 2008, excluding net working capital movements, was $15.9 billion. Net capital investment for the quarter was $5.7 billion. Total distribution to shareholders, in the form of dividends and share repurchases, was $3.8 billion and gearing was 14.5% at the end of the second quarter.

Oil and gas production, including oil sands bitumen production, for the second quarter 2008 was 3,126 thousand barrels of oil equivalent per day (boe/d), compared to 3,178 thousand boe/d in the same quarter last year. Excluding the impact of divestments and production sharing contracts (PSC) pricing effects, second quarter 2008 production was in line with the same quarter last year.

Shell also continued to expand through mergers. On July 17, 2008, Royal Dutch Shell, through its wholly owned subsidiary Shell Canada Limited, launched an offer to acquire all of the outstanding shares of Duvernay Oil Corp. at a total price of C$5.9 billion, including debt. The offer is subject to certain conditions and regulatory approvals.

"This is another set of competitive earnings for Shell shareholders," said Royal Dutch Shell CEO Jeroen van der Veer. "Good operating performance, combined with increased oil and gas prices, offset the impact of weaker downstream conditions in the second quarter 2008. Shell is making substantial, targeted investments to grow the company for shareholders and help ensure that energy markets remain well supplied. Spending is increasing on new acreage and selective acquisitions as we refresh the portfolio with new options for future growth. Our strategy is on track."