In its third quarter results release the oil major also said its overall loss was $6.1bn, sharply reversing a $5.4 gain made during the same period in 2014. Cash flow from operating activities for the third quarter 2015 was similar to its 2014 figure at $11.2bn compared with $12.8bn.
Shares in Shell were down 2.5% by late morning, while the FTSE 100 had fallen 1.11%.
“Shell’s integrated business and our performance drive are helping to mitigate the impact of low oil prices on the bottom line, in what is a difficult environment for the industry today,” said CEO Ben van Beurden. “We continue to improve the operational performance of our assets, and production volumes are up. Costs are falling across the company and Shell’s performance drive is delivering at the bottom line. Our financial framework is highly competitive, with balance sheet gearing at 12.7%, similar to year ago levels, despite a halving of oil prices. Both net investments and dividends have been covered by operating cash flow over the last year, when oil prices have averaged $60 per barrel.”
“We have halted exploration activities offshore Alaska, and stopped the construction of the Carmon Creek in-situ oil project in Canada,” van Beurden added. “These are difficult, but impactful decisions. I am determined that Shell will become a more focused and competitive company as a result.”
He also noted that the BG deal remains on track for completion in early 2016, and is ‘a springboard’ to focus Shell into fewer and more profitable themes, especially deep water and integrated gas.
“Royal Dutch Shell’s Q3 results painted a picture very much reflective of the woes of the oil industry, as revenues fell by 36% to $68.7bn,” said Helal Miah, investment research analyst at The Share Centre. However, investors should be aware that these figures included non-cash identified items such as adverse currency movements on deferred tax positions, financing items and large asset write-downs. Stripping these out gave a more palatable earnings figure of $1.8bn, but this was still a 70% fall on the same period last year.
