Investors ignored the old adage "Never sell Shell" after the Anglo-Dutch oil
supermajor disappointed with its quarterly profits.
Lower oil prices and shut-downs in the Gulf of Mexico and Qatar meant
Shell's profits -- stripping out the changing value of oil stocks -- were 13pc
below last year at pounds sterling 3.7bn.
The result undershot analysts' expectations, sending the company's stock
down 57p to 2208p.
Oil and gas production edged up by 2pc to 3.1m barrels of oil equivalent,
but this was wiped out by one-off costs and energy price fluctuations. Shell
took a hit of nearly pounds sterling 125m on dividends from an LNG joint
venture with an unnamed national oil company, which was late with payment.
Maintenance shut-downs in the Gulf also proved costly, because oil
produced in the region carries an unusually high profit margin.
But the greatest impact came from oil and gas prices.
Brent crude oil is down 11pc since this time last year, while the price
Shell gets for natural gas in North America collapsed by 52pc, due to a sudden
boom in US shale gas production.
"Our industry continues to see significant energy price volatility as a
result of economic and political developments," said boss Peter Voser. But he
said the company was "implementing a long-term, consistent strategy against
this volatile backdrop."
Shell, which pays its dividend in dollars, raised the payout by 2pc for
the quarter to $0.43.
America's gas glut also hampered BG Group (up 26p to 1246p), which was
forced to write down the value of its US shale assets by around pounds
sterling 830m. Pre-tax profit fell by 73pc to pounds sterling 388m in the
second quarter, but BG raised its interim dividend 10pc to 7.64p.
US giant Exxon Mobil posted second-quarter earnings of pounds sterling
10bn, but would have suffered a 21pc drop to pounds sterling 5.4bn if it had
not made pounds sterling 4.8bn on asset sales and tax benefits.
