Featured Company News – Shell Divests Woodside Petroleum’s Shares as Part of its Divestment Program

Research Desk Line-up: Ecopetrol Post Earnings Coverage

LONDON, UK / ACCESSWIRE / November 15, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Royal Dutch Shell PLC (NYSE: RDS-A) (NYSE: RDS-B), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=RDS-A. The Company announced on November 13, 2017, that its subsidiary, Shell Energy Holdings Australia Limited (SEHAL), has signed an agreement to divest its investment in the shares of Woodside Petroleum Limited (“Woodside”). The sale of Woodside’s shares is expected to be completed by November 14, 2017. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

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Details of the divestment

Initially Shell’s Australian arm SEHAL announced that it has signed an underwriting agreement with two investment banks to sell off 71.6 million of Woodside shares. The sale price of each Woodside’s share was done for A$31.10 per share, valuing the transaction at approximately $1.7 billion (A$2.2 billion) on pre-tax basis. These shares represented 8.5% issued capital of Woodside and nearly 65% of Shell’s interest in Woodside.

Later in an additional communication on the same day, Shell disclosed that SEHAL had upped the percentage of stake sale in Woodside due to strong demand from institutional investors. The Company has finalized the sale of total 111.8 million Woodside’s shares. The sale represented 13.28% issued capital of Woodside and 100% of SEHAL’s interest in Woodside. The deal is valued $2.7 billion (A$3.5 billion) on a pre-tax basis. The sale is expected to be completed on November 14, 2017, and the settlement is expected to be completed on November 16, 2017.

Commenting on the divestment of entire stake in Woodside, Jessica Uhl, CFO of Shell, said:

“This sale is another step towards the completion of our three-year $30 billion divestment programme, which is an important part of our strategy to reshape Shell, to deliver a world class investment case, and to strengthen our financial framework. Proceeds from the sale will contribute to reducing our net debt.”

Shell’s History with Woodside

Shell has been reducing its stake in Woodside from as early as November 2010, when the Company sold off 10% of the issued capital of Woodside. After the sale, Shell continued to hold 24.27% interest in Woodside, which was further reduced to 23.08% because Shell did not participate in Woodside’s dividend re-investment programme. Shell sold off nearly 9.5% of Woodside’s issued capital by divesting 78.27 million shares in June 2014. Shell had 13.58% stake in Woodside which was further reduced to 13.28% as Shell did not participate in Woodside’s dividend re-investment programme. Shell’s management had taken a decision in Q2 2016 that it would change the classification of its investment in Woodside from associate to an investment in securities. The decision was taken as Shell’s did not have a major influence on Woodside’s financial and operating policy decisions due to its reduced stake.

Shell’s Holdings in Australia

After the divestment of the stake in Woodside, Shell continues to hold stake in the following assets in Australia:

QGC venture (Shell operated, majority interest)
Arrow Energy (Shell 50% interest)
Gorgon LNG (Shell 25% interest)
North West Shelf (Shell 16.67% interest)
Prelude FLNG project (Shell operated 67.5% interest)
Browse Development venture (Shell 27% interest)
Sunrise LNG joint venture (Shell 26.6% interest)
Shell Energy Australia (Shell 100% interest)

Recent Divestment by Shell

Shell has been divesting its non-core assets as a part of its divestment plan to reduce debts. Shell’s divestment in FY17 include the following:

On November 01, 2017, Shell completed the sale of a package of UK North Sea assets to Chrysaor in a $3.8 billion deal. It also completed the sale of its 100% stake in Gabon onshore oil and gas interests, a portfolio Company of The Carlyle Group for $628 million.
In October 2017, Shell along with Shell Brazil Holding B.V. and Integral Investments B.V. sold off their 16.8% stake in Companhia de Gas de São Paulo for $380 million.
In August 2017, Shell completed the sale of its 50% stake in SADAF (Shell’s petrochemicals JV) to SABIC for $820 million.
In July 2017, Shell sold off its shares in Shell E&P Ireland Limited, which holds 45% interest in the Corrib gas venture, for $1.23 billion.
In May 2017, Shell sold off its 100% interests oil sands in Canada and reduced its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%. In the same month, Shell also sold off its Australian aviation business for $250 million.
In April 2017, Shell sold off its 20% interest in Vivo Energy Holding B.V. to Vitol Africa B.V. for $250 million. In the same month Shell announced the sale of its LPG business in Hong Kong and Macau to DCC Energy for $150.3 million.
In January 2017, Shell sold off its subsidiary companies Shell Integrated Gas Thailand Pte Limited and Thai Energy Co Limited to KUFPEC Thailand Holdings Pte Limited, a subsidiary of Kuwait Foreign Petroleum Exploration Company for $900 million.

Last Close Stock Review

At the closing bell, on Tuesday, November 14, 2017, Royal Dutch Shell’s stock slightly slipped 0.16%, ending the trading session at $63.80. A total volume of 2.93 million shares have exchanged hands. The Company’s stock price soared 16.53% in the last three months, 15.56% in the past six months, and 30.79% in the previous twelve months. Moreover, the stock rallied 17.32% since the start of the year. The stock is trading at a PE ratio of 24.61 and has a dividend yield of 5.89%. The stock currently has a market cap of $267.99 billion.

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