Shell’s Third Quarter Net Profit Up, CCS Earnings Down

on Nov 1, 2012

On 1 November 2012, Royal Dutch Shell (LON:RDSA, LON:RDSB, NYSE:RDS.A, NYSE:RDS.B) published its financial results for the third quarter of 2012, adding to the positive quarterly results news from the oil and gas sector. The company’s earnings on a current cost of supplies (CCS) basis, however, were lower relative to the same period in 2011.

**Shell Posts Higher Net Profit, Lower CCS Earnings**
The energy giant posted a $7.14 billion (£4.42 billion) income attributable to shareholders in the third quarter of 2012, a 2.3 percent increase from $6.98 billion in the same quarter in 2011, with earnings per share rising to $1.14, from $1.12.
The company, however, reported that its CCS earnings in the third quarter were $6.1 billion compared with $7.2 billion in the third quarter of 2011. In the company’s quarterly statement, Royal Dutch Shell’s CEO Peter Voser attributed the results to lower prices of oil and gas, as well as to lower chemical margins, offsetting the operating performance benefits and the underlying oil and gas production growth.

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!m[Results Reflect Investment In New Energy Supplies ](/uploads/story/694/thumbs/pic1_inline.png)“Shell is driving a long-term and consistent strategy, against a backdrop of volatile energy markets,” pointed out Mr Voser. “Our profits pay for substantial investments in new energy supplies, and they pay dividends for our shareholders.”
**Portfolio Developments**

In its statement, Shell also highlighted the acquisition of the remaining shares in Gasnor AS in Norway. In addition, the Anglo-Dutch company agreed to acquire 618,000 net acres (approximately 2,500 square kilometres) in the Permian basin in West Texas from Chesapeake Energy (NYSE:CHK) for $1.9 billion, with the transaction completed in October.
“We continue to refresh our portfolio, launching new oil and gas developments, making new exploration discoveries, purchasing new liquids-rich shale acreage and increasing our positions in oil and gas fields where we can add value with our innovation and scale,” noted Mr Voser in Shell’s press release.
Bloomberg reports that out of 27 analysts focusing on Shell, 13 recommend buying the company shares, 12 have hold ratings, and the remaining two advise selling the stock.


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