Replies to post #8408 on The Rising Influence of Rising Affluence

[DewDiligence]

The spread between Shell’s two classes of shares (now a record 7% premium for RDS-B) has made it impractical for Shell to conduct share buybacks to offset the dilution from dividends that shareholders elect to receive in shares than cash. This is impractical because, under Dutch tax law, non-cash dividends can be issued only in class-A shares, while buybacks can be made only by purchasing class-B shares.

This Bloomberg piece has more details:
http://www.bloomberg.com/news/2014-05-02/shell-reviews-scrip-dividend-payments-after-record-share-spread.html

[DewDiligence]

Shell (finally) logs a decent quarter; promises aggressive share buybacks:

http://online.wsj.com/articles/royal-dutch-shell-profit-jumps-1406788718

Excluding one-time items, [2Q14] current-cost-of-supplies profit was $6.13 billion, up 33% from $4.60 billion last year. Second-quarter sales were $115.27 billion, up slightly from $114.35 billion a year earlier.

…Oil and gas production during the quarter was 3.08 million barrels of oil equivalent a day [49% oil, 51% gas], about the same as a year earlier.

…Excluding one-time items like write downs, upstream earnings were $4.72 billion for the quarter, up from $3.53 billion in the prior period. Shell said the division benefited from increased production in the U.S. Gulf of Mexico and Iraq, as well as increased shipments of liquefied natural gas from a facility Shell bought earlier this year [from Repsol—see #msg-95520038].

Profit in Shell's refining, or downstream, business was…excluding one-time items…up 15%, to $1.35 billion.

Shell implicitly increased the guidance for share buybacks, as can be seen from slide #6 in the CC slide deck, which promises $30B of cumulative dividends and buybacks in 2014-2015 (http://s04.static-shell.com/content/dam/shell-new/local/corporate/corporate/downloads/quarterly-results/2014/q2/q2-2014-analyst-presentation-slides.pdf ).

Shares of both RDS-A and RDS-B rose today (despite the broad market sell-off) and are trading near their post-2008 highs.

Plans for the IPO of Shell’s “midstream” MLP (#msg-103497279) remain on track for 2H14.