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SHELL OIL ANNOUNCES FIRST QUARTER EARNINGS

 SHELL OIL ANNOUNCES FIRST QUARTER EARNINGS
 HOUSTON, May 1 /PRNewswire/ -- Shell Oil Company earned $194 million


in the first quarter of 1992, an increase of $69 million over the first quarter of 1991, President Frank H. Richardson announced today. The results were favorably impacted by special items, which more than offset unfavorable market conditions in the company's principal businesses.
 Operational earnings in oil and gas exploration and production declined as the benefit of increased crude oil and natural gas production was more than offset by weaker oil and gas prices. Special items benefited oil and gas earnings by $87 million. Results in the oil and chemical products businesses were impaired by depressed selling prices. Corporate items benefited $103 million primarily due to a tax adjustment.
 "We're making good progress toward our previously announced objective of achieving at least $800 million before tax in operating improvements, relative to 1990. Most of these improvements are expected to be realized by the end of 1992 by reducing operating costs and by improving manufacturing yields, operating reliability and energy utilization," Richardson said. "Importantly, programs implemented in 1991 produced significant cost reductions in petroleum operations during the first quarter of 1992. Since the end of 1990, our workforce has declined by 2,600, or 8 percent. We also continued to improve our asset portfolio through previously announced programs of selective investment and divestment."
 While earnings improved, cash flow from operating activities declined $350 million from the first quarter of 1991 to $137 million. An increased working capital requirement of about $460 million was the principal reason for the decline.
 "Capital expenditures decreased $187 million, or 31 percent, to $419 million in the first quarter of 1992, reflecting reduced spending, mainly in exploration and production, and we continue to monitor our spending closely in order to make timely adjustments as business conditions warrant," Richardson said.
 Revenues for the first quarter were $5.0 billion, compared with $5.7 billion for the same 1991 period, primarily reflecting generally lower selling prices and lower refined product sales volumes.
 Earnings increased 55 percent for the quarter.
 Oil and Gas Exploration and Production
 Oil and gas exploration and production earnings of $111 million were up $21 million from the same 1991 quarter. The 1992 quarter included net benefits from special items totaling $87 million. A natural gas contract settlement of $50 million and a prior-year tax adjustment were only partially offset by loss provisions for sale or disposal of certain oil and gas assets and a provision for litigation settlement.
 "Excluding special items, the major negative factor in the earnings comparison was lower prices for crude oil and natural gas, which more than offset the benefits from increased production and lower costs. Improvements were most notable in both producing and exploration costs," Richardson said.
 Domestic crude oil prices for the first quarter of 1992 averaged $13.51 per barrel, down $2.58 from the preceding quarter and $3.05 from a year ago. Average natural gas prices remained severely depressed, down 18 percent from the first quarter of 1991.
 Total net crude oil production, on a barrels-per-day basis, averaged 500,000, an increase of 14,000. Domestic crude oil production averaged 408,000, up 9,000, reflecting improved production from the Bullwinkle field in the Gulf of Mexico, partially offset by natural declines in older fields. Foreign crude oil production increased from 87,000 to 92,000 barrels per day.
 Net natural gas production, in millions of cubic feet per day, averaged 1,490 for the first quarter of 1992, up 84 from 1991. The increase was partly attributable to the Fairway Field in Mobile Bay, where production commenced in December 1991.
 Oil Products
 Oil products incurred a loss of $34 million in the first quarter of 1992, compared with earnings of $4 million in 1991. The 1991 quarter included a gain of about $20 million from the sale of an equity pipeline interest.
 "Operating results were depressed in both periods. The primary factor in the 1992 decline was lower margins, particularly early in the quarter, as selling prices declined more rapidly than raw material costs," Richardson said. "On a positive note, manufacturing costs improved as a result of restructuring our West Coast refining system, lower maintenance activity and increased refinery reliability."
 Refined product sales volumes in the first quarter of 1992 averaged 1,028,000 barrels per day, down 90,000, primarily due to selective market withdrawals.
 Chemical Products
 Chemical products earnings in the first quarter of 1992 were $39 million, down $32 million, primarily due to lower margins in commodity chemicals.
 Chemical sales volumes increased, reflecting higher demand across most product lines. This resulted in improved performances in downstream chemicals businesses. However, earnings in commodity chemicals declined as a result of depressed selling prices due to industry overcapacity.
 Corporate Items
 Corporate items contributed $71 million to earnings in the first quarter of 1992, an improvement of $116 million over 1991. Net special items in the 1992 quarter totaled $103 million, including benefits from a prior-year tax adjustment partially offset by a provision for a litigation settlement. Financing costs were essentially unchanged.
 SHELL OIL COMPANY
 Financial and Operating Highlights
 Financial Highlights
 (Millions of Dollars)
 First quarter 1992 1991
 Total Revenues $4,990 $5,668
 Cash provided by operating activities 137 487
 Net income 194 125
 Capital and exploratory expenditures 489 698
 Operating Segments Information
 (Millions of Dollars)
 Segment income from operations
 Oil and gas exploration and production $ 111 $ 90
 Oil products (34) 4
 Chemical products 39 71
 Other 7 5
 Corporate items 71 (45)
 Net income $ 194 $ 125
 Capital and Exploratory Expenditures
 (Millions of dollars)
 Capital expenditures
 Exploration and production
 Oil and gas $ 202 $ 342
 Other energy 16 18
 Oil products 145 165
 Chemical products 40 55
 Other 16 26
 Total 419 606
 Exploratory expenditures 70 92
 Total capital and exploratory expenditures $ 489 $ 698
 Operating Highlights
 (Millions of Dollars)
 First Quarter 1992 1991
 Revenues
 Refined products $2,207 $2,797
 Chemical products 787 879
 Crude oil 1,127 1,250
 Natural gas 229 257
 Coal 164 163
 Other 476 322
 Total $4,990 $5,668
 Chemical Products Revenues
 Primaries (olefins, aromatics) $ 222 $ 273
 Intermediates and solvents 290 355
 Polymers 248 228
 Other 27 23
 Total $ 787 $ 879
 Volumes (Thousands of barrels daily,
 exceptnatural gas)
 Refined Products Sales
 Automotive gasoline 566 614
 Jet fuel 114 142
 Kerosene, heating and diesel oils 34 46
 Heavy fuel oils 128 121
 All other products 186 195
 Total 1,028 1,118
 Refinery Processing Intakes 848 922
 Net Production
 Crude oil and condensate
 United States 408 399
 Foreign 92 87
 Natural gas liquids 56 59
 Natural gas (millions of cubic feet daily) 1,490 1,406
 Weighted average prices of net production ($/bbl)
 Crude oil and condensate
 United States $13.51 $16.56
 Foreign $16.88 $19.11
 Natural gas liquids $11.28 $14.88
 Consolidated Statement of Income
 (Millions of Dollars)
 First Quarter 1992 1991
 Revenues
 Sales and other operating revenue $5,356 $6,151
 Less: Consumer excise and sales taxes 591 606
 Total 4,765 5,545
 Equity earnings, interest and other income 225 123
 Total 4,990 5,668
 Costs and expenses
 Purchases and operating expenses 3,694 4,342
 Selling, general and administrative expenses 201 154
 Exploration, including exploratory dry holes 67 88
 Research expenses 38 43
 Depreciation, depletion, amortization and
 retirements 522 468
 Interest and discount amortization 67 62
 Income and operating taxes
 Operating taxes 178 193
 Federal and other income taxes 29 193
 Total 4,796 5,543
 Net income $ 194 $ 125
 Net income change 55 percent increase
 -0- 5/1/92
 /CONTACT: H. R. Hutchins or E. A. Pengelly, 713-241-4544, or N. Altstedter, 212-632-4888, all of Shell Oil/ CO: Shell Oil Company ST: Texas IN: OIL SU: ERN


TS -- NY020 -- 5373 05/01/92 10:16 EDT
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Date:May 1, 1992
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