Shell's Profit Falls on Shale Write-Down
Company Takes Charge of $2 Billion on Value of Liquids-Rich Shale Assets in North America
U.K.-listed oil and gas company Royal Dutch Shell RDSB.LN -5.00% PLC on Thursday posted a 60% fall in profit for the second quarter, largely from a charge of more than $2 billion on the value of its liquids-rich shale assets in North America.
Now Reporting
Track the performances of 150 companies as they report and compare their results with analysts' estimates. Sort by date and industry.
![[image]](http://si.wsj.net/public/resources/images/OB-NP072_earnin_D_20110421084109.jpg)
- http://s1.wsj.net/img/orange_bullet.gif); background-position: 0px 5px; background-repeat: no-repeat no-repeat;">
More photos and interactive graphics
Energy
- http://s1.wsj.net/img/orange_bullet.gif); background-position: 0px 5px; background-repeat: no-repeat no-repeat;">
MoneyBeat: Decoding Shell's Write-Down - http://s1.wsj.net/img/orange_bullet.gif); background-position: 0px 5px; background-repeat: no-repeat no-repeat;">
Nippon Steel & Sumitomo Metal Expects a Profit
The company warned that its North American exploration and production division was likely to remain at a loss during at least the second half of the year, and announced a strategic review of its North American portfolio with a view to selling some assets.
"Higher costs, exploration charges, adverse currency exchange-rate effects and challenges in Nigeria have hit our bottom line," said Shell Chief ExecutivePeter Voser in a statement. "These results...were clearly disappointing for Shell."
***The write-down on the North American shale assets reflected new information from exploration and appraisal drilling, and production, Shell said.****
The Anglo-Dutch energy company said its current cost of supplies, a figure that excludes gains or losses from inventories and is therefore equivalent to the net profit figure reported by U.S. oil companies, was $2.39 billion in the three months ended June 30, compared with $5.98 billion in the second quarter of 2012.
Excluding the one-off charges, Shell's profit was $4.6 billion, down 20% on the same quarter last year and 22% below average expectations of $5.9 billion, in a Dow Jones Newswires poll of 12 analysts.
Shell highlighted the negative effect of the worsening security situation in Nigeria, which reduced its second-quarter oil and gas production there by 100,000 barrels of oil equivalent a day. Total oil and gas production for the company was 3.062 million barrels of oil equivalent per day, a 1% fall on the year. Analysts had expected production of 3.146 million barrels of oil equivalent per day.
Group revenues were $112.67 billion, compared with $117.07 billion in the second quarter of 2012.
Diluted earnings per share were 0.27 cents, compared with 0.66 cents the previous year.
Shell also announced a second quarter dividend of 45 cents per ordinary share and 90 cents per American Depositary Share, an increase of 5% compared with the second quarter 2012.