Dividends march on at Shell

Though Shell's average daily production fell 3 per cent to 3.22m barrels of oil equivalent (boe) during 2011, revenues still advanced strongly. This was basically because realised prices for the group's oil and gas products increased by 39 per cent and 18 per cent, respectively, on last year's figures. This beneficial price environment also underpinned a 30 per cent rise in year-on-year cash-flow - before working capital requirements - to $43.2bn (£27.3bn).

Still, during the fourth quarter, falling gas prices in the US and lower refining margins combined to reduce net income by 7 per cent to $6.5bn from the previous quarter. The deteriorating trading environment was particularly noticeable within Shell's downstream segment, which recorded a quarterly loss of $278m, compared to a profit of $482m in 2010's fourth quarter.

Shell's net capital outlay will be around $30bn in the current year, most of which will be allocated towards the group's upstream exploration and production activities, including extending the life of its operations in the UK North Sea. The group will also focus on the expansion of its proven reserve base which, at around 14.2bn boe, is still in line with 2010's year-end figure - meanwhile, last year’s reserves replacement ratio is expected to be 100 per cent.

Looking ahead, over the next five-years, the production ramp-up at growth projects such as Pearl GTL and Qatargas 4 LNG will more than compensate for strategic asset sales and licence expiries. Indeed, by 2017, Shell expects average daily production to increase by a quarter on last year’s level to 4m boe.

Prior to these figures Deutsche Bank was expecting 2012 EPS of 513¢.