Royal Dutch Shell (RDS-B)

Royal Dutch Shell is, by revenue, the second largest oil company only behind Exxon Mobil. Royal Dutch Shell runs the popular Shell gasoline stations. Royal Dutch Shell already has a contract with the U.S. Government to extract deep sea oil in the Gulf of Mexico. Royal Dutch Shell is now looking to make another contract with the U.S. Government to extract the Oil Shale reserve that is in the Colorado/Utah area. The U.S. Government owns about 75% of the Oil Shale in the world. This reserve holds more oil than any Middle East country alone. If you have heard of Oil Sands and Suncor, this is even better because Oil Shale yields more than twice as much oil per ton. Royal Dutch Shell is at the forefront of In-Situ methods of extracting Oil Shale. Royal Dutch Shell has 20 years of research that designed their method. This method uses many wires that conduct electricity and use a large amount of heat to make the selected area's land temperature to thousands of degrees to speed up the process of Oil Shale to be converted into traditional oil that can be pumped out of the ground. The downsides to this method is that it requires several years of heating to finally convert the Oil Shale and a "Freeze Wall" must be put up to contain the heat in the selected area.

company is undervalued still due to last few years problems, which are basically solved now. shareholders litigation are being solved at the moment. purchase of all stock of shell canada has been completed which means the total proven reserves hv grown considerable thanks to the enormous sand-oil fields which are now in rd posession. company is a steady grower and payer of dividends. is presently grossly undervalued.

Shell is a dinosaur. It lacks the access to resources of the National Oil Companies and cannot compete with the cost structure of the independents. The National Oil Companies don't need the Shells anymore to develop their fields, they just call Halliburton or Schlumberger. The majority of Shell income still comes from fields discovered decades ago. Furthermore Shell's internal structures make it less entrepreneurial and nimble than its competitors..........

It is cheap. Pays a 4.5% divident and earns money by the boat loads.

If it's not obvious already, people in emerging markets around the world are consuming more gas and oil, driving up world demand. However, to keep a good image in many industrial countries, Shell is one of many companies doing a decent job at marketing their "greener" sides. They may be posed at the right intersection between maintaining consumers who want cleaner technologies and those who may simply want fuel for their cars.

This post is about fundamental internal management.

RDS has had huge success in buying its own companies - it got into the US in a big way when it purchased the remaining shares of Shell Oil Co (USA) and now its done the same with Shell Canada. It has had less success in replacing reserves organically.
This is a high tech E&P company - it can make hydrocarbons profitably in very bad geological conditions, and so it often gets the really tough fields when the pie is divided up by foreign governments. They are not as good as Exxon Mobil in creating low cost production facilities (example - Shell's new deepwater Nigerian facilities versus Exxon's Angola strategy of design once/build often/do it cheaper each time.
What RDS can do that Exxon Mobil can't do as well is to make the diplomatic deal and to have sustained presence in a country, no matter how difficult (examples are Nigeria, Lybia, Iran, and new efforts in Central Europe). This risked portfolio of international adventurism is also a weakness - a distributed structure of control helped lead to the reserves overstatements and the 25% restate.

I look to RDS to go to $85 within 2 years. Disclosure - I worked for RDS for 31 years and hold stock options.

I like these guys because they are in the right business. Lousy stock performance over the past 10 years but I think its somewhat unfair. They got a bad reputation when they had to restate oil reserves. Exxon stock price is lapping them (which doesn't mean anything) but I think that will make investors take notice and re-discover them. Same thing happened when VLO started to pass XOM.

The best of the big energy companies. I'd hold Shell over any other blue-chip oil company for the long term due to their management, culture, and track record.

Royal Dutch Shell has placed a $200 million bet that it can unlock Colorado's Green River Formation, which could produce 4 million barrels per day - 20 percent of current US consumption... Until we find alternative energy options that are cost efficient the need for shale deposits that hold millions if not billions amount of reserves will be in need.

Royal Dutch Shell at less than $70/share seems like a deal to me. Today it is 24% below its 52 week high of 87.9. Capital IQ report the P/E (ttm) at 6.73 ... lower than all the other majors save Valero (who has its own special set of problems right now). It forward annual dividend yield is estimated at 4.3%. The yield exceeds what you can get with a CD and you have price appreciation against its currently suppressed price.

Shell had made significant investments in shale oil reserves and technology. You can argue whether that was a good investment or not. But it is already spent money that could have a huge impact on future earning depending upon the direction of crude prices. Buy the B shares ... not the A shares. Both have the same earnings and dividends applied to them. The A shares have a tax withholding for the dividends, while the B-shares do not. There is no net tax implication to me. However, normally, the B-shares trade for a little more than the A-shares. Right now the B-shares are trading about $1.50 lower than the A-shares, so you could easily see $1.5/share improvement just with arbitrage against the A-shares.

Oil shale

We still need oil for the foreseeable future.

with the oil prices going up, the dollar getting weaker and the situation in the middle east remains unstable, i think that the big oil companies will outerperform in this time frame.

Getting killed along with oil, but that 7% dividend is very nice, and with a P/E of 3 whether that be real or not real earnings is still cheap. It's trading near book, and no matter what Oil will always be a huge part of our world, if it becomes a lesser they are protected by alternative investments

Good entry point.

low P/E Ratio 7.02

The price of oil will continue to rise as the USD continues to get weaker and foreign investors continue to purchase oil. As the economy recovers, consumers and businesses will also start to demand more oil, further forcing the price to increase.
Since Royal Dutch is a European company denominated in EUR, the company will also benefit from a strengthening EUR and a weakening USD.
Finally, as a fully integrated oil company, Royal Dutch Shell won't be a slave to the fluctuating price of oil. In fact, if the price of oil continues to increase, it should benefit from increased revenues and profit margin.

The economic recovery will be anemic and probably W-shaped, forcing the oil and gas inventories to continue stock piling. Any short term strength in oil prices will be supported by a flight from a weakening dollar, not from fundamental supply/demand economics. The oil price will again fall (albeit how much is up for debate) hurting yet another quarter of company profits. I predict this will be a trend for Q4 2009 until Q2 or Q3 of 2010. After this unstable period of time, I would bet that supply/ demand economics will function correctly and oil prices will be reflective of thier true price and not due to the inherent instability of investor speculation.

We are still deoendent on Oil