Shell share price subdued as group updates on strategy

Royal Dutch Shell’s share price (LON:RDSA) has fallen into negative territory in today’s session as the oil major posted a strategy update, flagging plans to lift spending and dividends. The update comes after the Anglo-Dutch company recently updated investors on its first-quarter performance, posting  what it referred to as a ‘strong start’ to the year.

As of 09:51 BST, Shell’s share price had given up 0.34 percent to 2,464.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having inched 0.15 percent higher to stand at 7,195.68 points. The group’s shares have lost more than six percent of their value over the past year, as compared with about a 7.5-percent fall in the Footsie.

Shell updates on strategy

Shell updated investors on its strategy today, announcing in a statement that it was on track to deliver on its 2020 commitments. The company further increased its organic free cash flow outlook to around $35 billion for 2025 at $60 per barrel, which, the oil major said, created the potential to distribute $125 billion or more to shareholders via dividends and share buybacks over the five-year period of 2021-2025.

“We have reshaped our company with a focus on value and have demonstrated a clear track record of delivering on our ambitious promises made at our Management Day in November 2017,” Shell’s chief executive Ben van Beurden commented in the statement.

Increased spending

Shell further noted that it is planning to invest,  on average, $30 billion of cash capex a year over 2021-2025, excluding major acquisitions, with a ceiling of $32 billion a year. Reuters noted in its coverage of the news that the company had in recent years vowed to maintain its spending at the lower end of a $25-30 billion range.

According to MarketBeat, the company currently has a consensus ‘buy’ rating, while the average target on the Shell share price stands at 2,972.69p.