Royal Dutch Shell To Cancel Scrip Dividend Program; Announces $25 Billion Share Buyback

By Carlo Martuscelli Features Dow Jones Newswires

Royal Dutch Shell PLC (RDSA.LN) said on Tuesday that it would be canceling its scrip-dividend program--dividends paid in shares in lieu of cash payments--from the fourth-quarter of 2017, as well as announcing a planned share-buyback program of $25 billion between 2017 and 2020.

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The Anglo-Dutch oil-and-gas company added that it was raising its outlook for annual organic free cash flow to between $25 billion and $30 billion by 2020, at a Brent crude oil price of $60 per barrel in 2016 real terms.

The company, which has undertaken a $30 billion divestment program, said it has made another $2 billion in divestments on top of the $23 billion completed, and has $5 billion in advanced progress. Once the program is completed, it will continue divestments at an average rate of more than $5 billion a year until at least 2020.

Shell said that reducing debt remains a priority and that it was approaching gearing--which is a measure of a company's debt levels--of 20% after more than $5 billion worth of divestments following the third quarter.

The company reported that it remains on track to deliver 1 million barrels of oil equivalent per day, and $10 billion of cash flow from operations of new projects by 2018 at $60 per barrel in 2016 real terms.

Annual underlying operational expenditure will be below $38 billion until 2020, the company said, while annual capital investment will continue to be between $20 billion and $25 billion, and if oil prices stay at current levels it will be managed towards the lower end of that range, or below it if needed.

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Write to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

November 28, 2017 02:54 ET (07:54 GMT)