Carrizo Oil & Gas sold for $3.2 billion

Callon Petroleum to acquire Carrizo Oil & Gas in all-stock deal valued at $3.2B

Carrizo sold for $3.2 billion, Stockwinners

Callon Petroleum (CPE) and Carrizo Oil & Gas (CRZO) announced that their Boards of Directors have unanimously approved a definitive agreement under which Callon will acquire Carrizo in an all-stock transaction valued at $3.2B.

This highly complementary combination will create a leading oil and gas company with scaled development operations across a portfolio of core oil-weighted assets in both the Permian Basin and Eagle Ford Shale.

Callon Petroleum buys Carrizo for $3.2B, Stockwinners

Under the terms of the agreement, Carrizo shareholders will receive a fixed exchange ratio of 2.05 Callon shares for each share of Carrizo common stock they own.

This represents $13.12 per Carrizo share based on Callon’s closing common stock price on July 12 and a premium of 18% to Carrizo’s trailing 60-day volume weighted average price.

Following the close of the transaction, Callon shareholders will own approximately 54% of the combined company, and Carrizo shareholders will own approximately 46%, on a fully diluted basis.

The all-stock transaction is intended to be tax-free to Carrizo shareholders.

The transaction has been unanimously approved by the Boards of Directors at both Callon and Carrizo.

In addition, each of the Carrizo directors has committed to vote his or her shares in favor of the transaction.

Upon closing, the Board of Directors of the combined company will consist of 11 members, including Callon’s eight current Board members and three to be appointed from the Board of Carrizo.

The combined company will be led by Callon’s executive management team and will remain headquartered in Houston, Texas.

The transaction, which is expected to close during the fourth quarter, is subject to customary closing conditions and regulatory approvals, including the approval of shareholders of both companies.

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Rig counts declined by three

  • Baker Hughes reports U.S. rig count down 3 to 1,022 rigs last week
  • The U.S. Rig Count is up 14 rigs from last year’s count of 1,008
Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count
Rig counts declined by three, See Stockwinners.com

Baker Hughes (BHGE) reports that the U.S. rig count is down 3 rigs from last week to 1,022, with oil rigs up 2 to 833, gas rigs down 5 to 189, and miscellaneous rigs unchanged at 0.

The U.S. Rig Count is up 14 rigs from last year’s count of 1,008, with oil rigs up 18 to 833, gas rigs down 3 to 189, and miscellaneous rigs down 1.

The U.S. Offshore Rig Count is up 1 rig to 23 and up 7 rigs year-over-year.

The Canada Rig Count is down 2 rigs from last week to 66, with oil rigs down 4 to 18 and gas rigs up 2 to 48.

The Canada Rig Count is down 36 rigs from last year’s count of 102, with oil rigs down 23 and gas rigs down 13.

Crude oil (WTI) is up 66 cents to $64.25 per barrel. Brent crude is up 95 cents to $64.27 per barrel.

The international offshore rig count for April 2018 was 194. Stockwinners
Oil is higher on the new, Stockwinners

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Anadarko Petroleum sold for $50 billion

Chevron to acquire Anadarko for $65 per share or $33B


Anadarko sold for $50 billion, Stockwinners

Chevron Corporation (CVX) announced that it has entered into a definitive agreement with Anadarko Petroleum (APC) to acquire all of the outstanding shares of Anadarko in a stock and cash transaction valued at $33B, or $65 per share.

Based on Chevron’s closing price on April 11, and under the terms of the agreement, Anadarko shareholders will receive 0.3869 shares of Chevron and $16.25 in cash for each Anadarko share.

Chevron sees synergies of $2 billion, Stockwinners

The total enterprise value of the transaction is $50B.

“The acquisition of Anadarko will significantly enhance Chevron’s already advantaged Upstream portfolio and further strengthen its leading positions in large, attractive shale, deepwater and natural gas resource basins.

Furthermore, Western Midstream Partners, LP (WES) is a successful midstream company whose assets are well aligned with the combined companies’ upstream positions, which should further enhance their economics and execution capabilities.”

Chevron’s Chairman and CEO Michael Wirth said, “This transaction builds strength on strength for Chevron. The combination of Anadarko’s premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business.

It creates attractive growth opportunities in areas that play to Chevron’s operational strengths and underscores our commitment to short-cycle, higher-return investments.

This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion, and will be accretive to free cash flow and earnings one year after close,” Wirth concluded.

“The strategic combination of Chevron and Anadarko will form a stronger and better company with world-class assets, people and opportunities,” said Anadarko Chairman and CEO Al Walker.

“I have tremendous respect for Mike and his leadership team and believe Chevron’s strategy, scale and operational capabilities will further accelerate the value of Anadarko’s assets.”

The acquisition consideration is structured as 75% stock and 25% cash, providing an overall value of $65 per share based on the closing price of Chevron (CVX) stock on April 11.

In aggregate, upon closing of the transaction, Chevron will issue approximately 200M shares of stock and pay approximately $8B in cash. Chevron will also assume estimated net debt of $15B.

Total enterprise value of $50B includes the assumption of net debt and book value of non-controlling interest.

The transaction has been approved by the boards of both companies and is expected to close in the second half of the year. The acquisition is subject to Anadarko (APC) shareholder approval. It is also subject to regulatory approvals and other customary closing conditions.

Upon closing, the company will continue be led by Michael Wirth as chairman and CEO. Chevron will remain headquartered in San Ramon, California.

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Rig counts rise in March

Baker Hughes announces March international rig count of 1,039, up 12

The international offshore rig count for April 2018 was 194. Stockwinners
The international offshore rig count rises in March, Stockwinners

Baker Hughes (BHGE) announced that the Baker Hughes international rig count for March 2019 was 1,039, up 12 from the 1,027 counted in February 2019, and up 67 from the 972 counted in March 2018.

The international offshore rig count for March 2019 was 247, down 3 from the 250 counted in February 2019, and up 62 from the 185 counted in February 2018.

The average U.S. rig count for March 2019 was 1,023, down 26 from the 1,049 counted in February 2019, and up 34 from the 989 counted in March 2018.

The average Canadian rig count for March 2019 was 151, down 79 from the 230 counted in February 2019, and down 67 from the 218 counted in March 2018.

The worldwide rig count for March 2019 was 2,213, down 93 from the 2,306 counted in February 2019, and up 34 from the 2,179 counted in March 2018.

Crude oil is up 2 cents to $62.12 per barrel.

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ExxonMobil to increase its Permian Basin output

Exxon Mobil to increase Permian output to 1M barrels per day by 2024

ExxonMobil to increase its Permian Basin output, Stockwinners

ExxonMobil (XOM) said it has revised its Permian Basin growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024 – an increase of nearly 80 percent and a significant acceleration of value.

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ExxonMobil expects to make 10% return on its Permian Basin fields at $35 per barrel oil, Stockwinners

The size of the company’s resource base in the Permian is approximately 10 billion oil-equivalent barrels and is likely to grow further as analysis and development activities continue.

ExxonMobil’s investments in the Permian Basin are expected to produce double-digit returns, even at low oil prices.

At a $35 per barrel oil price, for example, Permian production will have an average return of more than 10 percent.

The anticipated increase in production will be supported by further evaluation of ExxonMobil’s Delaware Basin’s increased resource size, infrastructure development plans, and secured capacity to transport oil and gas to ExxonMobil’s Gulf Coast refineries and petrochemical operations through the Wink-to-Webster, Permian Highway and Double E pipelines.

Among the company’s key advantages in the Permian, is its acreage position.

The company has large, contiguous acreage that enables multi-well pads in large development corridors connecting to efficient gathering systems, reducing development costs and accelerating production growth.

ExxonMobil’s scale, financial capacity and technical capabilities enable the company to maximize the value of the resource. ExxonMobil is actively building infrastructure to support volume growth.

Plans include construction at 30 sites to enhance oil and gas processing, water handling and ensure takeaway capacity from the basin. Construction activities include central delivery facilities designed to handle up to 600,000 barrels of oil and 1 billion cubic feet of gas per day and enhanced water-handling capacity through 350 miles of already-constructed pipeline.

The investment plans will also bring great benefits to the local area. ExxonMobil’s expansion in the region will benefit communities in West Texas and southeast New Mexico through billions in property tax revenue, economic development and the creation of high-paying jobs.

ExxonMobil remains one of the most active operators in the Permian Basin and has 48 drilling rigs currently in operation and plans to increase its rig count to approximately 55 by the end of the year.

Increased use of technology, including enhanced subsurface characterization, subsurface modeling and advanced data analytics to support optimization and automation, will help the company reduce costs, improve its development plan and increase resource recovery.

Crude oil is up 5 cents to $56.64 per barrel. XOM last traded at $80.22.

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EQGP Holdings sold for $20.00 per share

Equitrans Midstream to acquire EQGP Holdings for $20.00 per unit in cash

Equitrans Midstream Corporation (ETRN) announced that it has entered into definitive purchase agreements with certain unitholders of EQGP Holdings (EQGP) to acquire limited partner interests in EQGP for $20.00 per unit in cash, which is a 17.5% premium to the EQGP closing market price as of November 29, 2018.

The Private Purchases are expected to close on or about December 31, 2018, after which ETRN and its affiliates will own more than 95% of the outstanding EQGP Common Units. Upon closing of the Private Purchases, ETRN intends to exercise the Limited Call Right under EQGP’s partnership agreement to acquire all remaining EQGP Common Units not then owned by ETRN and its affiliates.

If the Limited Call Right is exercised, the remaining holders of EQGP Common Units will receive at least the same cash price per unit that will be paid in the Private Purchases.

The Limited Call Right is expected to close in January 2019 and will be a taxable transaction for EQGP unitholders.

ETRN intends to use the cash proceeds from a newly issued Term Loan B to finance the Private Purchases and the purchases pursuant to the Limited Call Right.

ETRN has secured committed financing in support of these purchases. ETRN also announced that it has made a proposal to EQM Midstream Partners (EQM) for the exchange of its incentive distribution rights and the economic general partner interest in EQM for 95 million units in EQM and a non-economic general partner interest in EQM, subject to the closing of the Private Purchases and completion of the Limited Call Right.

ETRN expects that a portion of the units received will be in the form of Payment-In-Kind Units.

The PIK Units would receive distributions in the form of additional PIK Units and would convert on a one-to-one basis into common units representing limited partner interests in EQM at a date to be determined.

Final terms of the Proposed IDR Transaction are subject to negotiation with the board of directors of EQM’s general partner or its conflicts committee, and assuming an agreement is reached, ETRN expects that the Proposed IDR Transaction would close in the first quarter of 2019.

Upon completion of the Private Purchases, the Limited Call Right, and the Proposed IDR Transaction, ETRN will have accomplished a full simplification of EQGP and EQM, resulting in a projected 61% ownership of EQM.

Additionally, EQM will be the only publicly traded partnership under ETRN and is expected to benefit from the elimination of the IDR burden, as well as stronger coverage and balance sheet metrics.

Highlights: The proposed transactions would not result in a distribution cut for EQM unitholders; Targeting 6% – 8% annual distribution growth beginning in 2019; 2019 distribution coverage in excess of 1.0x; Long-term distribution coverage target in excess of 1.2x beginning in 2020; Long-term debt to EBITDA target of 3.5x – 4.0x beginning in 2020; PIK Units will provide balance sheet and coverage support; Improves cost of capital; No equity issuance is required to fund capital projects for the next several years; Reduces corporate overhead associated with the elimination of a publicly traded entity.

ETRN expects that the EQM Conflicts Committee will review the Proposed IDR Transaction. Unitholder voting is not required in connection with the Private Purchases, the exercise of the Limited Call Right, or the Proposed IDR Transaction.


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Barron’s is bullish on Tesla, bearish on Deutsche Bank

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH   MENTIONS:

Comcast a bargain despite risk – Comcast (CMCSA; CMCSK) has fallen from favor with investors following its the proposal to buy SKY (SKYAY) as they fear it will get into a bidding war with Fox (FOXA) and overpay for Sky, Andrew Bary writes in this week’s edition of Barron’s. Now the stock trades at a discount to rival Charter (CHTR) and yields 2.2%, he notes.

Investors may want to look at Microsoft to play tech-stock downdraft  – For the past two weeks, large-cap technology stocks have sold off on investor concerns following the data crisis at Facebook (FB), Bill Luby writes in this week’s edition of Barron’s. One collateral-damage victim has been Microsoft (MSFT), and it is “easy to argue” that the downturn in its shares is overdone, Luby contends, adding that the tech giant’s strong fundamentals, combined with good technical support for its shares just below their recent price, make the company’s stock a strong candidate for a rebound.

Oil refiners primed for profits – The outlook for companies that turn crude oil into gasoline has looked better and demand for refining is poised to grow faster than supply in the years ahead, leading to a surge in profits and share prices across the industry, Jack Hough writes in this week’s edition of Barron’s. Refiners include Andeavor (ANDV), Marathon Petroleum (MPC), Philips 66 (PSX) and Valero (VLO), the report notes.

New AI era for chip makers– Artificial intelligence is about to become a lot more pervasive as the computer circuitry to perform AI grows more prevalent, Tiernan Ray writes in this week’s edition of Barron’s. The desire to embed AI in just about anything has meant that more chip makers are racing to diffuse their designs for circuitry that processes the algorithms that drive the software, he note, adding that relevant companies spanning the semiconductor industry include Nvidia (NVDA), CEVA (CEVA), Synopsys (SNPS) and Cadence Design Systems (CDNS).

Tesla stock may rally later this year – In a follow-up article, Barron’s notes that investors have had fun following Tesla’s journey, reaping stock gains of 600% in the last five years, but some wonder if “the music is going to stop.” The key question is whether Tesla (TSLA) can raise enough cash to keep going, the report notes, arguing that Tesla should “live to fight another day” to produce cars, and may even start to turn a cash profit next year. Barron’s believes later this year, its shares will most likely rally as clouds lift.

BEARISH  MENTIONS:

New CEO may not save Deutsche Bank stock – News that Deutsche Bank (DB) Chairman Paul Achleitner has been looking for another CEO grabbed the financial industry’s attention, but just as it may be premature to organize farewell drink for current CEO John Cryan, it may also be too soon to turn bullish on the shares, Victor Reklaitis writes in this week’s edition of Barron’s. There are plenty of reasons to stay bearish on the stock and the latest escalation of tensions between Achleitner and Cryan is just “a piece of Deutsche Bank puzzle,” he adds.


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Willbros Group sold for $100M

Primoris to acquire Willbros Group in all-cash transaction

 

Primoris to acquire Willbros Group, Stockwinners.com
Primoris to acquire Willbros Group,

Primoris Services Corporation (PRIM) announced that it has entered into a definitive merger agreement to acquire Willbros Group (WG) in an all-cash transaction.

Primoris will pay 60c per share for all of the outstanding stock of Willbros and will settle all of the existing Willbros debt obligations, for an enterprise value of approximately $100M.

Willbros is a specialty energy infrastructure contractor serving the Oil & Gas and Power industries across its three operating segments: Utility Transmission and Distribution, Oil & Gas, and Canada. Willbros’ infrastructure services platform provides a diverse base of utility, natural gas, and renewable customers with comprehensive engineering, construction, maintenance, repair, and restoration solutions.

Upon completion of the transaction, Primoris expects the Willbros UTD business to become a new operating segment, Primoris UTD, which continues Primoris’ strategic plan for growing its Master Service Agreement revenue base.

Primoris anticipates that Willbros’ Lineal Oil & Gas operations will be incorporated into Primoris’ Utilities & Distribution segment, the Houston-based Oil & Gas facilities operations will become part of Primoris’ Pipeline & Underground segment, and the Canadian business will become part of Primoris’ Power, Industrial, and Engineering segment.

Primoris expects the financial benefits of the transaction to include: For the first 12 months after closing, revenues of approximately $660M, including estimated UTD revenues of $470M, For the first 12 months after closing, EBITDA of $25M, including approximately $7M in annual cost savings, The addition of approximately $400M to Total Backlog, including approximately $300M from the UTD business and within 24-30 months after the closing of the transaction, additional annual cost savings of $7.5 million to $10M.

Under the terms of the merger agreement, which was unanimously approved by the Boards of Directors of both Willbros and Primoris, each stockholder of Willbros will receive 60c per share in cash, without interest, which represents a significant premium to the closing price of Willbros common stock on March 27, 2018.

In addition, Primoris will settle all of the existing Willbros debt obligations. The transaction has an enterprise value of approximately $100M.

Primoris intends to finance the transaction through cash on hand and its existing credit facilities.

As part of the transaction, Primoris has agreed to provide Willbros up to $20M in secured bridge financing to support Willbros’ working capital liquidity needs prior to the transaction close.

The transaction is subject to approval by Willbros stockholders and certain other closing conditions. In connection with the execution of the merger agreement, certain Willbros directors and stockholders, together representing approximately 17% of Willbros’ outstanding shares, have entered into voting agreements with Primoris, whereby such stockholders agreed, among other things, to vote in favor of the adoption of the merger agreement. The transaction is expected to be completed in the second quarter of 2018.


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Rig count continues to rise

Baker Hughes reports U.S. rig count up 5 to 995 rigs

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Rig Counts Rise 

Baker Hughes (BHGE) reports that the U.S. rig count is up 5 rigs from last week to 995, with oil rigs up 4 to 804, gas rigs up 1 to 190, and miscellaneous rigs unchanged at 1.

The U.S. Rig Count is up 186 rigs from last year’s count of 809, with oil rigs up 152, gas rigs up 35, and miscellaneous rigs down 1 to 1.

The U.S. Offshore Rig Count is unchanged at 13 rigs and down 5 rigs from last year’s count of 18.

The Canada Rig Count is down 58 rigs from last week to 161, with oil rigs down 51 to 93, gas rigs down 7 to 68, and miscellaneous rigs unchanged at 0.

The Canada Rig Count is down 24 rigs from last year’s count of 185, with oil rigs up 23, gas rigs down 46, and miscellaneous rigs down 1 to 1.


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TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B. Stockwinners.com
TPG Pace Energy to acquire oil and gas assets from EnerVest fo $2.66B

TPG Pace Energy (TPGE) announced it has entered into definitive agreements with certain funds managed by EnerVest to acquire the oil and gas assets within EnerVest’s South Texas Division for approximately $2.66B in cash and stock.

As part of the transaction, TPGE and EnerVest are partnering to create Magnolia Oil & Gas Corporation, a new company led by Steve Chazen who will serve as Magnolia’s full-time chairman, president and CEO.

EnerVest will retain a significant ownership stake in Magnolia.

The transaction is subject to approval by the TPGE shareholders and other customary closing conditions, and the new company will trade on the NYSE under a new ticker upon closing, which is expected to occur late in the second quarter of 2018.

The formation of Magnolia creates a large-scale, pure-play South Texas operator with top-tier Eagle Ford and Austin Chalk asset positions with more than 40,000 boe per day of production.

Magnolia will acquire EnerVest’s approximately 360,000 total net acres in South Texas, which consists of approximately 14,000 net acres in one of the most prolific sections of Karnes County and 345,000 net acres in the emerging, high-growth potential Giddings Field.

The acreage position is almost entirely held by production, and the production from the combined asset base is heavily weighted toward oil.

TPGE closed at $9.73.


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International rig counts rise

Baker Hughes reports January international rig count up by 6 to 960 rigs

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Rig Counts Rise

Baker Hughes (BHGE) reported international rig count for January 2018 was 960, up 6 from the 954 counted in December 2017, and up 27 from the 933 counted in January 2017.

The international offshore rig count for January 2018 was 196, up 5 from the 191 counted in December 2017, and down 10 from the 206 counted in January 2017.

The average US rig count for January 2018 was 937, up 7 from the 930 counted in December 2017, and up 254 from the 683 counted in January 2017.

The average Canadian rig count for January 2018 was 278, up 73 from the 205 counted in December 2017, and down 24 from the 302 counted in January 2017.

The worldwide rig count for January 2018 was 2,175, up 86 from the 2,089 counted in December 2017, and up 257 from the 1,918 counted in January 2017.

WTI crude is down 33 cents to $63.06 pr barrel.


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December international rig counts rise

Baker Hughes reports December international rig count 954

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes (BHGE), a GE company, announced that the Baker Hughes international rig count for December 2017 was 954, up 12 from the 942 counted in November 2017, and up 25 from the 929 counted in December 2016.

The international offshore rig count for December 2017 was 191, up 8 from the 183 counted in November 2017, and down 19 from the 210 counted in December 2016.

The average US rig count for December 2017 was 930, up 19 from the 911 counted in November 2017, and up 296 from the 634 counted in December 2016.

The average Canadian rig count for December 2017 was 205, up 1 from the 204 counted in November 2017, and down 4 from the 209 counted in December 2016.

The worldwide rig count for December 2017 was 2,089, up 32 from the 2,057 counted in November 2017, and up 317 from the 1,772 counted in December 2016.

WTI crude last traded at $61.65 per barrel, up 21 cents.  Brent crude is up 16 cents to $67.78 per barrel.


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International rig counts decline

Baker Hughes reports November international rig count 942, down 9 rigs

Oil Rigs, See Stockwinners.com Market Radar to read the latest on oil and rig count
Oil Rig counts decline

Baker Hughes (BHGE), a GE company, announced that the Baker Hughes international rig count for November 2017 was 942, down 9 from the 951 counted in October 2017, and up 17 from the 925 counted in November 2016.

The international offshore rig count for November 2017 was 183, down 21 from the 204 counted in October 2017, and down 28 from the 211 counted in November 2016.

The average US rig count for November 2017 was 911, down 11 from the 922 counted in October 2017, and up 331 from the 580 counted in November 2016.

The average Canadian rig count for November 2017 was 204, unchanged from the 204 counted in October 2017, and up 31 from the 173 counted in November 2016.

The worldwide rig count for November 2017 was 2,057, down 20 from the 2,077 counted in October 2017, and up 379 from the 1,678 counted in November 2016.

WTI Crude is up 6 cents to $56.02 per barrel. Brent crude is up 27 cents to $61.49 per barrel. USO closed at $11.20.


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Rig counts continue to rise

Baker Hughes reports U.S. rig count up 6 to 929 rigs 

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Rig Counts Rise – See Stockwinners.com Market Radar to read more

Baker Hughes reports that the U.S. rig count is up 6 rigs from last week to 929, with oil rigs up 2 to 749, gas rigs up 4 to 180, and miscellaneous rigs unchanged.

The U.S. Rig Count is up 332 rigs from last year’s count of 597, with oil rigs up 272, gas rigs up 61, and miscellaneous rigs down 1 to 0.

The U.S. Offshore Rig Count is down 2 rigs from last week to 20 and down 2 rigs year-over-year.

The Canada Rig Count is up 7 rigs from last week to 222, with oil rigs up 4 to 111 and gas rigs up 3 to 111, and miscellaneous rigs unchanged.

The Canada Rig Count is up 22 rigs from last year’s count of 200, with oil rigs up 11, gas rigs up 13, and miscellaneous rigs down 2 to 0.

Crude oil is up 85 cents to $58.25 per barrel.  Brent crude is up $1.01 to $63.64 per barrel.


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Shell paints a rosy picture

Shell annual organic free cash flow outlook increased to $25B-$30B by 2020

Shell annual organic free cash flow outlook increased to $25B-$30B by 2020

Royal Dutch Shell (RDS.a) CEO Ben van Beurden updated investors on the company’s strategy, setting out plans to grow returns and free cash flow, and outlining its ambition to reduce the net carbon footprint of its energy products.

Van Beurden highlighted three updates from his presentation:

“We have increased our outlook for organic free cash flow, which has been consistently strong over the past five quarters. We have also made significant progress with our divestment programme, allowing us to reduce net debt in that time.

Meanwhile, we intend to cancel our scrip dividend programme with effect from the fourth quarter 2017.”

The outlook for annual organic free cash flow has increased to $25 to $30 billion by 2020 at a Brent crude oil price of $60 per barrel (real terms 2016).

This is $5 billion more than the outlook Shell provided during its capital markets day in June 2016.

The delivery of new projects continues, and the company remains on track to deliver 1 million barrels of oil equivalent per day, and $10 billion of cash flow from operations from new projects by 2018, at $60 per barrel, real terms 2016.

It expects to deliver an incremental $5 billion cash flow from operations by 2020. Annual capital investment will continue to be between $25 and $30 billion, and at current oil prices capital investment will be managed towards the bottom end of that range, or lower if needed.

Annual underlying operational expenditure will remain below $38 billion until 2020, with efficiency gains expected to deliver further reductions, building on the more than 20% reduction in operational expenditure since 2014. The company expects to continue to grow organic free cash flow throughout the 2020s at a more moderate rate.

Increased distributions to shareholders in the form of share buybacks in line with the plans confirmed below is expected to support a stronger growth in its metrics per share.

RDS-a closed at $61.85.


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