RDSA Shell Plc

By David Hodari

Royal Dutch Shell PLC, one of the world's largest oil and gas companies, released its first quarter 2020 results Thursday. The company cut its dividend for the first time since World War II after first-quarter profits fell by nearly half as the coronavirus pandemic hit.

Oil demand and crude prices have collapsed in recent months with coronavirus-driven lockdowns suffocating transport and industrial activity. Here are some more remarks from Shell's report:

On Earnings:

"[Current cost of supplies] earnings attributable to shareholders excluding identified items were $2.9 billion, reflecting lower realised oil, gas and LNG prices, weaker realised refining and chemicals margins as well as lower sales volumes, compared with the first quarter 2019."

Chair of the Board Chad Holliday on shareholder returns:

"Given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent. Following the announcement not to continue with the next tranche of the share buyback programme, the Board has also decided to reduce the first quarter 2020 dividend and reset to 16 US cents per share."

On Gas projects:

"During the quarter, Shell announced that it will not proceed with the proposed Lake Charles LNG project due to the current market conditions. Accordingly, Energy Transfer will take over as the project developer. In April, Shell took the final investment decision to develop the first phase of Arrow Energy's (Shell interest 50%) Surat Gas Project in Queensland, Australia, which will bring up to 90 billion cubic feet per year of new gas to market at peak production."

On Gas performance:

"Compared with the first quarter 2019, Integrated Gas earnings... primarily reflected lower realised LNG, oil and gas prices as well as lower contributions from trading and optimisation and higher depreciation, partly offset by favourable movements in deferred tax positions and higher LNG sales volumes."

"Total production increased by 12% mainly due to lower maintenance activities and field ramp-ups in Trinidad and Tobago and Australia. LNG liquefaction volumes increased mainly as a result of lower maintenance activities and new LNG capacity, partly offset by lower feedgas availability compared with the first quarter 2019."

"Cash flow from operating activities... mainly reflected lower cash earnings, partly offset by higher cash inflows related to commodity derivatives."

On Upstream:

"Compared with the first quarter 2019, Upstream earnings... reflected lower realised oil and gas prices as well as lower total production volumes. Earnings were also negatively impacted by lower sales volumes associated with the timing of liftings... total production was 5% lower, mainly due to divestments, field decline and lower production in the NAM joint venture..."

On Oil Products:

"Products earnings excluding identified items reflected weaker realised refining margins and lower contributions from crude oil trading and optimisation as well as unfavourable movements in deferred tax positions."

On Refining & Trading:

"Earnings... reflected lower realised refining margins and lower contributions from crude oil trading and optimisation, partly offset by lower operating expenses, compared with the first quarter 2019."

Write to David Hodari at david.hodari@wsj.com.

(END) Dow Jones Newswires

April 30, 2020 06:22 ET (10:22 GMT)

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