Published Thu, 12 Oct 2017 13:43:16 -0400 on Seeking Alpha
Investment Thesis: After three years into a dramatic decline in oil and gas prices, big oil companies - E&P oil companies as well - have successfully demonstrated that they know how to tune their business model to the right frequency to generate positive cash flow, shrink debt levels, and keep paying a sizable dividend.
It was not an easy task, of course, despite some improvement from January 2016 when the price of oil plummeted to a record low of $27.50 a barrel. Oil remains stubbornly depressed, more than 50% lower than it was in June 23, 2014, when the decline really started. That particular day, the Brent oil price closed above $115 a barrel and started its unrelenting plunge into oblivion.
Brent Crude Oil Spot Price data by YCharts
As a consequence, OPEC and non-OPEC countries came up with several agreements to rebalance the ailing oil market, and oil prices are seen as more stable since June 2016.
While many investors continue to have lingering doubts that OPEC will successfully implement these agreements to the fullest, even a partial compliance can do the magic trick, and it seems to work according to the chart above. That said, after three years of cuts in exploration expenditure, the market has gotten much closer to stabilizing on its own anyway.
The recent quarterly results show a three-year-long ongoing campaign across the entire oil industry to cut costs and capital spending to allow operating profitably in a $45-55 a barrel price... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
|ROYAL DUTCH SHELL A||68.62||27.1||2.59||3.76||5.35|
|ROYAL DUTCH SHELL B||70.13||0.0||0.00||3.76||5.23|
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