Shell sets buyback target at $5bn
AMSTERDAM: Royal Dutch Shell has launched a buyback of $3 billion to $5 billion of its own shares, saying the amount was expected to be at the upper end of the range.
The Anglo-Dutch oil giant announced the buyback programme and merged its two former parents earlier this year, aiming to restore shareholders’ and investors’ confidence after a damaging reserves overbooking scandal last year.
The overbooking was blamed partly on the complicated management and ownership structure. “Given strong cash generation for the first half of 2005, buybacks are expected to be at the upper end of the $3-$5 billion guidance for 2005,” the company said.
Analysts have said Shell is expected to buy back $4.5 billion of its own shares by the end of the year. Shell reiterated that it would buy back more Dutch-listed shares than UK shares.
El Paso asset sale fetches $500m
HOUSTON: Natural gas producer and pipeline company El Paso Corp said it has agreed to sell certain gas midstream assets to Crosstex Energy LP for $500 million.
El Paso said it expects to report a pretax gain of approximately $400 million on the sale, which is expected to close in the fourth quarter of 2005.
The sale includes interests in the Eunice, Pelican, Riverside, Sabine Pass and Blue Water processing and fractionation facilities, and is subject to regulatory approval.
El Paso said it was also in the process of selling its interest in a processing plant in South Texas, which would conclude its midstream asset sales.
Since mid-March, El Paso has announced $1.2 billion in asset sales out of a target of $1.2 billion to $1.6 billion. Those sales are part of the company’s plan to reduce its debt net of cash to about $15 billion by the end of 2005.
Fugro first-half net profit doubles
AMSTERDAM: Dutch engineering consultancy Fugro NV’s net profit more than doubled in the first half, driven by higher spending by the oil and gas industry.
The mid-cap company, which generates 70 per cent of revenues from survey services for the oil and gas industry, said net profit rose to 32.1 million euros ($39.8 million) on turnover of 518 million euros. It made a net profit of 15.5 million euros in the first half of last year.
Fugro reiterated it expected full-year turnover at well above 1 billion euros and a net profit margin of 7.5 to 8 per cent. The company also announced it had agreed to form a joint venture with Brazil’s Oceansatpeg to offer marine survey, positioning and diving services in Brazil. The move is meant to tap into the growing development of oil and gas fields offshore Brazil.
