As the graph shows, shares in Shell and BG have been hit by the downturn in oil prices. However, shares in BG jumped following the announcement of the merger and have stayed close to this higher level. Shell's cost-cutting measures are a means to try to limit the impact of end-market weakness on the group. Unsurprisingly, pre-tax profit for the group's first half of trading dropped by a third to $11.4bn. However, Shell plans to pay a healthy $1.88 per share dividend in 2015. Shell's management believes its proposed merger with BG will enhance free cash flow, enabling debt reduction, and further improvement in the company's capacity to pay dividends and fund share buybacks.
