November 3, 2015 / 7:32 AM / 2 years ago

BRIEF-Shell sees 40 pct increase in synergies from BG deal

Nov 3 (Reuters) - Shell :

* Competitive underlying performance in low oil prices - planning for prolonged downturn

* Reorganisation of Shell upstream increases accountability for performance and aligns us to deliver on strategy

* Announcing a 40 pct increase in synergies expected from recommended combination with BG

* Marvin Odum, upstream Americas director, will lead and become director of new unconventional resources organisation, spanning heavy oil and shales activities in Americas

* Intention to pay a $1.88 per share dividend in 2015, at least $1.88 per share dividend in 2016

* Intends to turn off scrip dividends in 2017 and undertake a share buyback of at least $25 billion in period 2017-2020

* NAV oil price breakeven for recommended BG-Shell combination is currently estimated to be at mid $60s brent prices

* Increased expected level of identified and reported pretax synergies from $2.5 billion to $3.5 billion in 2018, up 40 pct from earlier guidance

* Restructuring changes will come into effect on Jan. 1, 2016.

* BG transaction on track for completion in early 2016

* Further analysis and shell’s integration planning for recommended combination with BG has helped identify a $1 billion (40 pct) increase in pretax synergies to $3.5 billion

* Integrated gas will be established as a stand-alone organisation, to be led by Maarten Wetselaar as integrated gas director and member of executive committee

* New upstream organisation will span Shell’s worldwide conventional oil and gas businesses, will be led by current upstream international director, Andrew Brown

* Pro-forma combined capital investment for Shell and BG in 2016 is expected to be around $35 billion

* $20 billion of asset sales for 2014-15 and a further $30 billion planned for 2016-18 (post completion of recommended combination with BG)

* Plans to deliver a 10 pct reduction in operating costs and 20 pct reduction in capital spending in 2015, together totalling $11 billion

* Expected level of identified pretax synergies now $2 billion of operating cost savings and a $1.5 billion reduction in exploration expenditure in 2018

* Capital efficiency gains in Shell portfolio are expected to be some $4 billion in 2015-16

* Assessment of expected accretion for both cash flow from operations per share and earnings per share from BG deal remains unchanged Source text for Eikon: Further company coverage: (Bengaluru Newsroom + 91 80 6749 1136)

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