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Royal Dutch Shell plc: 4th Quarter and Full Year 2015 Unaudited Results

THE HAGUE, The Netherlands
, February 4, 2016 /PRNewswire/ --
  • Royal Dutch Shell's (NYSE:RDS.A)(NYSE:RDS.B) fourth quarter 2015 earnings, on a current cost of supplies (CCS) basis (see Note [2]), were $1.8 billion compared with $4.2 billion for the same quarter a year ago. Full year 2015 CCS earnings were $3.8 billion compared with $19.0 billion in 2014.
  • Fourth quarter 2015 CCS earnings excluding identified items (see page 5) were $1.8 billion compared with $3.3 billion for the fourth quarter of 2014, a decrease of 44%. Fourth quarter 2015 earnings were positively impacted by non-cash net gains of some $0.3 billion related to currency exchange rate effects on deferred tax positions. Full year 2015 CCS earnings excluding identified items were $10.7 billion compared with $22.6 billion in 2014.
  • Compared with the fourth quarter 2014, CCS earnings excluding identified items benefited from continued strong Downstream results reflecting steps taken by the company to improve financial performance. In Upstream, earnings were impacted by the significant decline in oil and gas prices, partly offset by lower costs. Contributions from integrated gas were higher mainly as a result of improved trading performance and the effect of the strengthening of the Australian dollar on deferred tax positions.
  • Fourth quarter 2015 basic CCS earnings per share excluding identified items decreased by 44% versus the fourth quarter 2014. Full year 2015 basic CCS earnings per share excluding identified items decreased by 53% versus 2014.
  • Total dividends distributed to Royal Dutch Shell plc shareholders in the quarter were $3.0 billion, of which $1.2 billion were settled under the Scrip Dividend Programme. No shares were bought back during the fourth quarter.
  • Gearing at the end of 2015 was 14.0% compared with 12.2% at the end of 2014.
  • A fourth quarter 2015 dividend has been announced of $0.47 per ordinary share and $0.94 per American Depositary Share ("ADS").
  • Royal Dutch Shell is expected to announce a dividend of $0.47 per ordinary share and $0.94 per ADS in respect of the first quarter 2016.

   
    SUMMARY OF UNAUDITED RESULTS
                Quarters                       $ million                 Full year
    Q4 2015  Q3 2015 Q4 2014   %[1]                                 2015     2014      %

                                      Income/(loss) attributable
                                      to Royal Dutch Shell plc
        939  (7,416)     595   +58    shareholders                 1,939   14,874    -87
                                      Current cost of supplies
                                      (CCS) adjustment for
        901   1,296    3,568          Downstream                   1,903    4,167
      1,840  (6,120)   4,163   -56    CCS earnings                 3,842   19,041    -80
         15  (7,890)     901          Identified items[2]         (6,834)  (3,521)
                                      CCS earnings excluding
      1,825   1,770    3,262   -44    identified items            10,676   22,562    -53
                                      Of which:
        493    (425)   1,730          Upstream                     1,780   16,505
      1,524   2,617    1,550          Downstream                   9,748    6,265
                                      Corporate and
       (192)   (422)     (18)          Non-controlling interest     (852)    (208)

                                      Cash flow from operating
      5,423  11,231    9,608   -44    activities                  29,810   45,044    -34

                                      Basic CCS earnings per
       0.29   (0.97)    0.66   -56    share ($)                     0.61     3.02    -80
                                      Basic CCS earnings per ADS
       0.58   (1.94)    1.32          ($)                           1.22     6.04
                                      Basic CCS earnings per
                                      share excl. identified
       0.29    0.28     0.52   -44    items ($)                     1.69     3.57    -53
                                      Basic CCS earnings per ADS
       0.58    0.56     1.04          excl. identified items ($)    3.38     7.14

       0.47    0.47     0.47     -    Dividend per share ($)        1.88     1.88      -
       0.94    0.94     0.94          Dividend per ADS ($)          3.76     3.76

[1] Q4 on Q4 change

[2] See page 5

Royal Dutch Shell Chief Executive Officer Ben van Beurden commented: "The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company, and improving shareholder returns.

We are making substantial changes in the company, reorganising our Upstream, and reducing costs and capital investment, as we refocus Shell, and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies.

In 2015, we significantly curtailed spending by reducing the number of new investment decisions and designing lower-cost development solutions. For 2016, we have exited the Bab sour gas project in

Abu Dhabi
, and are postponing final investment decisions on LNG Canada and Bonga South West in deep water
Nigeria
. Operating costs and capital investment have been reduced by a total of $12.5 billion as compared to 2014, and we expect further reductions in 2016.

As a result of our actions in 2015, we have retained a strong balance sheet position, with 14% gearing. Shell will take further impactful decisions to manage through the oil price downturn, should conditions warrant that. Shell's dividends for 2015 were $1.88 per share, and are expected to be at least $1.88 per share in 2016, as previously announced."

FOURTH QUARTER 2015 PORTFOLIO DEVELOPMENTS 

Upstream 

During the quarter in

Canada
, Shell announced the start of commercial operations at the Quest carbon capture and storage project. Quest will capture one-third of the emissions from Shell's Scotford Upgrader, which turns oil sand bitumen into synthetic crude that can be refined into fuel and other products. The carbon dioxide ("CO2") is then transported through a pipeline and injected more than two kilometres underground below multiple layers of impermeable rock formations. Quest is designed to capture and safely store more than one million tonnes of CO2 each year.

In

Ireland
, Shell announced first production from the Corrib gas field (Shell interest 45%). At peak annual production, the Corrib gas field is expected to produce 45 thousand barrels of oil equivalent per day ("boe/d").

Shell started up the gas injection facilities at the Shell-operated Gumusut-Kakap deep-water development (Shell interest 33%) in

Malaysia
. This follows first oil production, achieved in the fourth quarter 2014.

In

New Zealand
, Shell agreed to sell its interest in the
Maui
natural gas pipeline (Shell interest 83.75%) to First State Investments for a consideration of NZD 335 million (around USD 200 million). The transaction, subject to regulatory approval, is expected to complete in 2016.

In

Nigeria
, Shell Nigeria Exploration and Production Company Ltd announced first production from the Bonga Phase 3 project (Shell interest 55%). Bonga Phase 3 is an expansion of the Bonga Main development, with peak production expected to be some 50 thousand boe/d. The oil will be transported through existing pipelines to the Bonga floating production, storage and offloading facility.

Also in

Nigeria
, Shell completed the sale of its 30% interest in Oil Mining Lease ("OML") 71 and OML 72 to West African Exploration and Production Company Limited, as part of its ongoing portfolio review and optimisation. Both of these blocks were non-producing.

In Shell's exploration programme there was one successful non-operated oil discovery with the Beryl K well (Shell interest 45%) in the

United Kingdom
.

Shell had continued success with near-field exploration discoveries in

Brunei
,
the Netherlands
, and
Oman
.

In January, Shell announced that after careful and thorough evaluation of technical challenges, it has decided to exit the joint development of the Bab sour gas reservoirs (Shell interest 40%) with ADNOC in the emirate of

Abu Dhabi, United Arab Emirates
, and to stop further joint work on the project. The evaluation concluded that for Shell, the development of the project does not fit with the company's strategy, particularly in the economic climate prevailing in the energy industry.

Upstream divestment proceeds totalled some $0.3 billion for the fourth quarter 2015.

Downstream 

During the quarter, Shell announced that it reached final investment decision ("FID") on a project to increase alpha olefins production at its chemical manufacturing site in

Geismar, Louisiana
. Shell will construct a fourth alpha olefins unit, adding 425 thousand tonnes of capacity. This project will make the site the largest alpha olefins producer in the world.

Shell also announced FID on a project to build a major new unit at the Pernis refinery in

Rotterdam, the Netherlands
. The solvent deasphalter unit will remove heavier fractions from crude oil, allowing the refinery to upgrade a larger proportion of its oil intake into lighter, high-grade products. Construction work is planned to start in 2016, subject to permit approvals, with completion expected by the end of 2018.

In the

United Kingdom
, Shell completed the sale of 185 service stations across the
United Kingdom
to independent dealers. All 185 service stations will retain the Shell brand and sell Shell's fuels.

In

the United States
, Shell completed the sale of an additional 3.7% interest in Shell Midstream Partners, L.P. to public investors via the issuance of an additional 9,200,000 LP units for net proceeds of $297 million.

Downstream divestment proceeds totalled some $1.1 billion for the fourth quarter 2015 and included proceeds from the divestments of the Butagaz LPG business in

France
, Shell's 75% interest in Tongyi Lubricants in
China
, the retail, commercial fuels, and supply and distribution logistics businesses in
Norway
.

KEY FEATURES OF THE FOURTH QUARTER AND FULL YEAR 2015 

  • Fourth quarter 2015 CCS earnings (see Note [2]) were $1,840 million, 56% lower than for the same quarter a year ago. Full year 2015 CCS earnings were $3,842 million, 80% lower than in 2014
  • Fourth quarter 2015 CCS earnings excluding identified items (see page 5) were $1,825 million compared with $3,262 million for the fourth quarter 2014, a decrease of 44%. Fourth quarter 2015 CCS earnings excluding identified items benefited from continued strong Downstream results reflecting steps taken by the company to improve financial performance. In Upstream, earnings were impacted by the significant decline in oil and gas prices, partly offset by lower costs. Contributions from integrated gas were higher mainly as a result of improved trading performance and the effect of the strengthening of the Australian dollar on deferred tax positions.
    Full year 2015 CCS earnings excluding identified items were $10,676 million compared with $22,562 million in 2014, a decrease of 53%.
  • Basic CCS earnings per share for the fourth quarter 2015 decreased by 56% versus the same quarter a year ago. Full year 2015 basic CCS earnings per share decreased by 80% versus 2014.
  • Basic CCS earnings per share excluding identified items for the fourth quarter 2015 decreased by 44% versus the same quarter a year ago. Full year 2015 basic CCS earnings per share excluding identified items decreased by 53% versus 2014.
  • Cash flow from operating activities for the fourth quarter 2015 was $5.4 billion, compared with $9.6 billion for the same quarter last year. Excluding working capital movements, cash flow from operating activities for the fourth quarter 2015 was $3.8 billion, compared with $3.5 billion for the same quarter last year.
    Full year 2015 cash flow from operating activities was $29.8 billion, compared with $45.0 billion in 2014. Excluding working capital movements, cash flow from operating activities for the full year 2015 was $24.3 billion, compared with $38.6 billion in 2014
  • Capital investment (see Note [B]) for the fourth quarter 2015 was $7.9 billion and divestments (see Note [C]) were $1.7 billion.
    Full year 2015 capital investment was $28.9 billion, $8.4 billion lower than in 2014. This was delivered by efficiency improvements and more selectivity on new investments. Capital investment for Shell and BG combined for the full year 2016 is expected to be $33 billion, down some 45% from combined spending, which peaked in 2013. Flexibility for further reductions is available and will be utilised should conditions warrant this. Full year 2015 divestments were $5.5 billion, of which proceeds from the sales of interests in Shell Midstream Partners, L.P. were $0.6 billion.
  • Operating costs (see Note [F]) for the full year 2015 decreased by $4.1 billion, to $41.1 billion, and Shell's costs are expected to fall again in 2016, by a further $3 billion. This is some 15% lower than 2014 levels. Synergies from the BG combination will be in addition to that.
  • Total dividends distributed to Royal Dutch Shell plc shareholders in the fourth quarter 2015 were $3.0 billion, of which $1.2 billion were settled by issuing some 49.0 million A shares under the Scrip Dividend Programme. Total dividends distributed in the full year 2015 were $12.0 billion, of which $2.6 billion were settled by issuing some 96.3 million A shares under the Scrip Dividend Programme.
  • Under our share buyback programme during the full year 2015, some 12.7 million shares were bought back for cancellation for a consideration of $0.4 billion. No shares were bought back during the fourth quarter.
  • Return on average capital employed on a reported income basis (see Note [D]) was 1.9% at the end of 2015 compared with 7.1% at the end of 2014.
  • Gearing (see Note [E]) was 14.0% at the end of 2015 versus 12.2% at the end of 2014.
  • Oil and gas production for the fourth quarter 2015 was 3,039 thousand boe/d, a decrease of 5% compared with the fourth quarter 2014. Fourth quarter 2015 production was in line with the same period last year excluding the impact of divestments, curtailment and underground storage reinjection at NAM in
    the Netherlands
    , a Malaysia PSC expiry, PSC price effects, and security impacts in
    Nigeria
    .
    Full year 2015 oil and gas production was 2,954 thousand boe/d, a decrease of 4% compared with 2014. Full year 2015 production volumes increased by 1% compared with 2014, excluding the impact of divestments, curtailment and underground storage reinjection at NAM in
    the Netherlands
    ,
    Abu Dhabi
    licence and Malaysia PSC expiries, PSC price effects, and security impacts in
    Nigeria
    .
  • Equity sales of LNG of 5.68 million tonnes for the fourth quarter 2015 were 8% lower than for the same quarter a year ago.
    Full year 2015 equity sales of LNG of 22.62 million tonnes were 6% lower than in 2014.
  • Oil products sales volumes for the fourth quarter 2015 were 1% lower than for the fourth quarter 2014. Chemicals sales volumes for the fourth quarter 2015 increased by 7% compared with the same quarter a year ago.
    Full year 2015 oil products sales volumes were 1% higher than in 2014. Full year 2015 chemicals sales volumes increased by 1% compared with 2014.
  • When the 2015 Annual Report and Form 20-F is filed, the proved reserves reporting will update on Shell's 2015 performance, and will not include reserves from the proposed combination with BG.
  • At the end of 2015, total proved reserves on an SEC basis are expected to be 11.7 billion boe, after taking into account 2015 production.
    With 2015 production of 1.1 billion boe, our proved Reserves Replacement Ratio for the year on an SEC basis is expected to be -20%, a total reduction of 1.4 billion boe to our SEC proved reserves. The 3-year average headline proved Reserves Replacement Ratio on an SEC basis is expected to be 48%.
    When final volumes are reported in the 2015 Annual Report and Form 20-F, Shell expects that SEC proved oil and gas reserves will be reduced by 0.2 billion boe, before taking into account production.
    Falling oil prices have reduced Shell’s reserves in 2015. Consistent with our past practise, the impact of changing prices is calculated by replacing the 2014 year average price with the 2015 year average price to determine the potential adjustment to SEC proved reserves at the end of 2014. Applying this methodology, 1.7 billion of proved reserves would have been excluded from our 2014 SEC proved reserves if the 2015 year average price was used. This adjustment of 1.7 billion boe includes de-booking of 0.4 billion boe of proved reserves at Carmon Creek in
    Canada
    , and 0.95 billion boe associated with Muskeg River Mine in
    Canada
    . However, due to significant structural cost improvements at the mine in 2015 these 0.95 billion boe are retained in 2015. These barrels are not considered additions for SEC reporting purposes as they were included in our 2014 SEC proved reserves.
    Further information will be provided in our 2015 Annual Report and Form 20-F, which is expected to be filed in March 2016.
  • Supplementary financial and operational disclosure for the fourth quarter 2015 is available at http://www.shell.com/investor

SUMMARY OF IDENTIFIED ITEMS 

Earnings for the fourth quarter 2015 reflected the following items, which in aggregate amounted to a net gain of $15 million (compared with a net gain of $901 million for the fourth quarter 2014), as summarised in the table below:

  • Upstream earnings included a net charge of $826 million, primarily reflecting asset impairments of some $640 million and a net charge on fair value accounting of certain commodity derivatives and gas contracts of some $210 million, partly offset by gains on divestments of some $100 million. Upstream earnings for the fourth quarter 2014 included a net gain of $915 million.
  • Downstream earnings included a net gain of $978 million, primarily reflecting gains on divestments of some $995 million and the net positive impact of fair value accounting of commodity derivatives of some $100 million, offset by impairment charges of some $100 million. Downstream earnings for the fourth quarter 2014 included a net charge of $6 million.
  • Corporate results and Non-controlling interest included a net charge of $137 million, mainly reflecting a tax provision. Earnings for the fourth quarter 2014 included a net charge of $8 million.

   
    SUMMARY OF IDENTIFIED ITEMS
                 Quarters                       $ million              Full year
      Q4 2015   Q3 2015   Q4 2014                                   2015       2014
                                    Segment earnings impact of
                                    identified items:
        (826)   (8,218)       915   Upstream                      (7,443)      (664)
         978      (136)        (6)  Downstream                       495     (2,854)
                                    Corporate and
        (137)      464         (8)  Non-controlling interest         114         (3)
          15    (7,890)       901   Earnings impact               (6,834)    (3,521)

These identified items are shown to provide additional insight into segment earnings and income attributable to shareholders. They include the full impact on Shell's CCS earnings of the following items:

  • Divestment gains and losses
  • Impairments
  • Fair value accounting of commodity derivatives and certain gas contracts (see Note [A])
  • Redundancy and restructuring

Further items may be identified in addition to the above.

EARNINGS BY BUSINESS SEGMENT 


   
    UPSTREAM
                 Quarters                      $ million                  Full year
    Q4 2015  Q3 2015  Q4 2014   %[1]                               2015     2014      %

                                       Upstream earnings
                                       excluding identified
        493    (425)   1,730    -72    items                      1,780   16,505    -89
       (333) (8,643)   2,645   -113    Upstream earnings         (5,663)  15,841   -136

                                       Upstream cash flow from
      2,916   4,044    4,991    -42    operating activities      13,181   31,839    -59

                                       Upstream capital
      5,820   5,848    7,511    -23    investment                23,527   31,293    -25

                                       Liquids production
                                       available for sale
      1,532   1,528    1,526      -    (thousand b/d)             1,509    1,484     +2
                                       Natural gas production
                                       available for sale
      8,741   7,837    9,782    -11    (million scf/d)            8,380    9,259     -9
                                       Total production
                                       available for sale
      3,039   2,880    3,213     -5    (thousand boe/d)           2,954    3,080     -4

                                       Equity sales of LNG
       5.68    5.31     6.20     -8    (million tonnes)           22.62    23.97     -6

[1] Q4 on Q4 change

Fourth quarter Upstream earnings excluding identified items were $493 million compared with $1,730 million a year ago. Identified items were a net charge of $826 million compared with a net gain of $915 million for the fourth quarter 2014 (see page 5).

Compared with the fourth quarter 2014, earnings excluding identified items were impacted by the significant decline in oil and gas prices. This was partly offset by decreased costs and lower exploration expenses, including lower well write-offs, and lower taxation.

Compared with the fourth quarter 2014, earnings benefited from the impact of the strengthening of the Australian dollar and Brazilian real on deferred tax positions, which increased earnings by $553 million and $135 million respectively. The benefit of these deferred tax movements in the fourth quarter 2015 was $257 million after tax, compared with a negative impact of some $431 million after tax in the same period a year ago.

Upstream

Americas
excluding identified items incurred a loss.

Global liquids realisations were 46% lower than for the fourth quarter 2014. Global natural gas realisations were 33% lower than for the same quarter a year ago, with a 44% decrease in the

Americas
and a 31% decrease outside the
Americas
.

Fourth quarter 2015 production was 3,039 thousand boe/d compared with 3,213 thousand boe/d a year ago. Liquids production was in line with the same period a year ago and natural gas production decreased by 11% compared with the fourth quarter 2014. Fourth quarter 2015 production was in line with the same period last year excluding the impact of divestments, curtailment and underground storage reinjection at NAM in

the Netherlands
, a Malaysia PSC expiry, PSC price effects, and security impacts in
Nigeria
.

The continuing ramp-up of existing fields, in particular Cardamom and Mars B in the

Americas
, Bonga Main in
Nigeria
and Gumusut-Kakap in
Malaysia
, contributed some 88 thousand boe/d to production compared with the fourth quarter 2014.

Equity LNG sales volumes of 5.68 million tonnes decreased by 8% compared with the same quarter a year ago, mainly reflecting the expiry of the Malaysia LNG Dua JVA.

Full year Upstream earnings excluding identified items were $1,780 million compared with $16,505 million in 2014. Identified items were a net charge of $7,443 million, compared with a net charge of $664 million in 2014 (see page 5).

Compared with 2014, Upstream earnings excluding identified items were impacted by the significant decline in oil and gas prices. Earnings benefited from lower costs including favourable exchange rate effects and divestments, and decreased depreciation.

Compared with 2014, the impact of the weakening of the Australian dollar and Brazilian real on deferred tax positions reduced earnings by $131 million and $311 million respectively. The impact of these deferred tax movements in the full year 2015 was $1,022 million after tax, compared with an impact of $580 million after tax in 2014.

Global liquids realisations were 48% lower than in 2014. Global natural gas realisations were 27% lower than in 2014, with a 47% decrease in the

Americas
and a 24% decrease outside the
Americas
.

Full year 2015 production was 2,954 thousand boe/d compared with 3,080 thousand boe/d in 2014. Liquids production increased by 2% and natural gas production decreased by 9% compared with 2014. Production volumes in 2015 increased by 1%, compared with 2014, excluding the impact of divestments, curtailment and underground storage reinjection at NAM in

the Netherlands
,
Abu Dhabi
license and Malaysia PSC expiries, PSC price effects, and security impacts in
Nigeria
.

New field start-ups and the continuing ramp-up of existing fields, in particular Cardamom and Mars B in the

Americas
and Bonga NW in
Nigeria
, contributed some 117 thousand boe/d to production in 2015, which more than offset the impact of field declines.

Equity LNG sales volumes of 22.62 million tonnes were 6% lower than in 2014, mainly reflecting the expiry of the Malaysia LNG Dua JVA, the Woodside divestment and increased maintenance activities.


   
    DOWNSTREAM
                 Quarters                      $ million                    Full year
    Q4 2015  Q3 2015  Q4 2014   %[1]                                 2015     2014     %

                                       Downstream CCS earnings
                                       excluding identified
      1,524    2,617    1,550    -2    items                        9,748    6,265    +56
      2,502    2,481    1,544   +62    Downstream CCS earnings     10,243    3,411   +200

                                       Downstream cash flow from
      2,101    6,605    4,698   -55    operating activities        14,076   11,292    +25

                                       Downstream capital
      1,974    1,211    2,098    -6    investment                   5,119    5,910    -13

                                       Refinery processing
      2,630    2,776    2,718    -3    intake (thousand b/d)        2,805    2,903     -3

                                       Oil products sales
      6,297    6,586    6,392    -1    volumes (thousand b/d)       6,432    6,365     +1

                                       Chemicals sales volumes
      4,178    4,452    3,895    +7    (thousand tonnes)           17,148   17,008     +1

[1] Q4 on Q4 change

Fourth quarter Downstream earnings excluding identified items were $1,524 million compared with $1,550 million for the fourth quarter 2014. Identified items were a net gain of $978 million, compared with a net charge of $6 million for the fourth quarter 2014 (see page 5).

Compared with the fourth quarter 2014, Downstream earnings excluding identified items benefited from improved refining industry conditions. Earnings also benefited from lower costs including favourable exchange rate effects, and lower taxation. Earnings were impacted by lower results from marketing, largely as a result of negative exchange rate effects, and decreased contributions from trading and supply. Contributions from Chemicals decreased mainly as a result of weaker base chemicals and intermediates industry conditions.

Refinery intake volumes were 3% lower compared with the same quarter last year. Refinery availability was 83%, compared with 95% for the fourth quarter 2014, mainly as a result of increased maintenance.

Oil products sales volumes decreased by 1% compared with the same period a year ago, mainly reflecting lower trading volumes.

Chemicals sales volumes increased by 7% compared with the same quarter last year. Chemicals manufacturing plant availability increased to 81% from 65% for the fourth quarter 2014, reflecting recovery at the Moerdijk chemical site in

the Netherlands
, partly offset by increased maintenance activities.

Full year Downstream earnings excluding identified items were $9,748 million compared with $6,265 million in 2014. Identified items were a net gain of $495 million, compared with a net charge of $2,854 million in 2014 (see page 5).

Compared with 2014, Downstream earnings excluding identified items benefited from higher realised refining margins, reflecting the industry environment, lower costs including the impact of favourable exchange rate effects and divestments, and lower taxation. Contributions from marketing were impacted by negative exchange rate effects, with strong underlying performance. Contributions from Chemicals increased, reflecting improved industry conditions for intermediates and for base chemicals in

Asia
, partly offset by unit shut-downs at the Moerdijk chemical site in
the Netherlands
.

Refinery intake volumes were 3% lower compared with 2014. Excluding portfolio impacts, refinery intake volumes were 1% lower than in 2014. Refinery availability was 90%, compared with 93% in 2014.

Oil products sales volumes increased by 1% compared with 2014, mainly reflecting higher trading volumes.

Chemicals sales volumes increased by 1% compared with 2014, primarily driven by increased demand in

Asia
and overall improved intermediates market conditions. Chemicals manufacturing plant availability was 85%, in line with 2014.

   
    CORPORATE AND NON-CONTROLLING INTEREST
                Quarters                       $ million                   Full year
     Q4 2015    Q3 2015    Q4 2014                                      2015      2014

                                     Corporate and Non-controlling
                                     interest excl. identified
       (192)      (422)       (18)   items                              (852)     (208)
                                     Of which:
       (158)      (355)       (24)   Corporate                          (536)     (153)
        (34)       (67)         6    Non-controlling interest           (316)      (55)

                                     Corporate and Non-controlling
       (329)        42        (26)   interest                           (738)     (211)

Fourth quarter Corporate results and Non-controlling interest excluding identified items were a loss of $192 million, compared with a loss of $18 million for the same period last year. Identified items for the fourth quarter 2015 were a net charge of $137 million, whereas earnings for the fourth quarter 2014 included a net charge of $8 million (see page 5).

Compared with the fourth quarter 2014, Corporate results excluding identified items mainly reflected lower tax credits and higher net interest expense, partly offset by favourable exchange rate effects.

Compared with the fourth quarter 2014, earnings were negatively impacted by the strengthening Brazilian real on deferred tax positions related to financing of the Upstream business by $84 million. The impact of this on the fourth quarter 2015 earnings excluding identified items was a charge of $4 million after tax, compared with an $80 million gain in the same period a year ago.

Full year Corporate results and Non-controlling interest excluding identified items were a loss of $852 million compared with a loss of $208 million in 2014. Identified items for 2015 were a net gain of $114 million, whereas earnings for 2014 included a net charge of $3 million (see page 5).

Compared with 2014, Corporate results excluding identified items mainly reflected adverse currency exchange rate effects, partly offset by higher tax credits.

Compared with 2014, earnings benefited from the impact of the weakening Brazilian real on deferred tax positions related to financing of the Upstream business by $160 million. The impact of this on the full year 2015 earnings excluding identified items was a gain of $252 million after tax, compared with a gain of $92 million in 2014.

OPERATIONAL OUTLOOK FOR THE FIRST QUARTER 2016 

The following information reflects Shell's asset base as of December 31, 2015.

Compared with the first quarter 2015, Upstream earnings are expected to be impacted by some 40 thousand boe/d associated with the impact of curtailment and underground storage utilisation at NAM, some 20 thousand boe/d related to a Malaysia PSC expiry, and some 15 thousand boe/d as a result of divestments. The impact of maintenance is expected to be lower by some 30 thousand boe/d. In

Qatar
, the Pearl GTL plant will undergo planned maintenance starting in March and continuing into the second quarter 2016.

Refinery availability is expected to decline in the first quarter 2016 as a result of higher turnaround activity and increased maintenance compared with the same period a year ago. Unit shutdowns at the Bukom chemical site in

Singapore
are expected to result in similar Chemicals manufacturing plant availability as in the first quarter 2015, which was heavily impacted by unit shutdowns at the Moerdijk chemical site in
the Netherlands
.

Upon the successful completion of the recommended combination with BG which it is expected on February 15, 2016, Shell's consolidated financial results will include BG's financial performance and the fair values of its assets and liabilities.

FORTHCOMING EVENTS 

First quarter 2016 results and first quarter 2016 dividend are scheduled to be announced on May 4, 2016. Second quarter 2016 results and second quarter 2016 dividend are scheduled to be announced on July 28, 2016. Third quarter 2016 results and third quarter 2016 dividend are scheduled to be announced on October 27, 2016.

Shell's Capital Markets Day will be held on June 7, 2016 in

London, United Kingdom
.

PROFIT ESTIMATES 

Certain statements set out in the update on fourth quarter 2015 and full year unaudited results and related supplementary prospectus published by Shell on January 20, 2016 represented profit estimates under the

UK
City Code on Takeovers and Mergers. The profit estimates relating to the fourth quarter ended December 31, 2015 have been confirmed by the fourth quarter results set out in this announcement and the profit estimates relating to the full year ended December 31, 2015 have been superseded by the publication of the unaudited full year results set out in this announcement.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


   
    CONSOLIDATED STATEMENT OF INCOME
                 Quarters                      $ million                   Full year
    Q4 2015  Q3 2015  Q4 2014    %[1]                               2015     2014     %
     58,146   68,706   92,374           Revenue                  264,960  421,105
                                        Share of profit of
                                        joint ventures and
        793      193      818           associates                 3,527    6,116
                                        Interest and other
      1,237      285      974           income                     3,669    4,123
                                        Total revenue and other
     60,176   69,184   94,166           income                   272,156  431,344
     43,166   51,612   73,640           Purchases                194,644  327,278
                                        Production and
      7,515    7,419    7,465           manufacturing expenses    28,095   30,038
                                        Selling, distribution
                                        and administrative
      3,090    2,896    3,426           expenses                  11,956   13,965
                                        Research and
        297      291      363           development                1,093    1,222
        549    3,406    1,323           Exploration                5,719    4,224
                                        Depreciation, depletion
      5,281   12,156    4,991           and amortisation          26,714   24,499
        519      527      430           Interest expense           1,888    1,804
                                        Income/(loss) before
       (241)  (9,123)   2,528    -110   taxation                   2,047   28,314    -93
     (1,183)  (1,730)   2,110           Taxation                    (153)  13,584
                                        Income/(loss) for the
        942   (7,393)     418    +125   period                     2,200   14,730    -85
                                        Income/(loss)
                                        attributable to
                                        non-controlling
          3       23     (177)          interest                     261     (144)
                                        Income/(loss)
                                        attributable to Royal
                                        Dutch Shell plc
        939   (7,416)     595     +58   shareholders               1,939   14,874    -87

[1] Q4 on Q4 change


   
    EARNINGS PER SHARE
                 Quarters                           $                      Full year
      Q4 2015     Q3 2015     Q4 2014                                   2015        2014
         0.15       (1.17)       0.09     Basic earnings per share      0.31        2.36
         0.15       (1.16)       0.09     Diluted earnings per share    0.30        2.36


   
    SHARES[1]
                 Quarters                        Millions                  Full year
      Q4 2015     Q3 2015     Q4 2014                                   2015        2014
                                        Weighted average number of
                                        shares as the basis for:
      6,356.0     6,327.7     6,301.0   Basic earnings per share     6,320.3     6,311.5
      6,416.1     6,396.9     6,301.1   Diluted earnings per share   6,393.8     6,311.6

                                        Shares outstanding at the
      6,397.5     6,348.4     6,295.0   end of the period            6,397.5     6,295.0

[1] Royal Dutch Shell plc ordinary shares of EUR0.07 each

Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated Financial Statements.


   
    CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                 Quarters                       $ million                   Full year
      Q4 2015     Q3 2015    Q4 2014                                     2015       2014
                                       Income/(loss) for the
          942      (7,393)       418   period                           2,200     14,730
                                       Other comprehensive income
                                       net of tax:
                                       Items that may be
                                       reclassified to income in
                                       later periods:
                                       - Currency translation
       (1,249)     (3,341)    (2,398)  differences                     (7,121)    (5,321)
                                       - Unrealised gains/(losses)
         (119)       (324)      (560)  on securities                     (707)      (797)
                                       - Cash flow hedging
         (202)        139        537   gains/(losses)                      61        528
                                       - Share of other
                                       comprehensive income/(loss)
                                       of joint ventures and
          (41)         19        (86)  associates                         (40)      (156)
       (1,611)     (3,507)    (2,507)  Total                           (7,807)    (5,746)
                                       Items that are not
                                       reclassified to income in
                                       later periods:
                                       - Retirement benefits
        3,140      (2,369)    (3,011)  remeasurements                   4,951     (6,482)
                                       Other comprehensive
                                       income/(loss) for the
        1,529      (5,876)    (5,518)  period                          (2,856)   (12,228)
                                       Comprehensive income/(loss)
        2,471     (13,269)    (5,100)  for the period                    (656)     2,502
                                       Comprehensive income/(loss)
                                       attributable to
          (16)        (53)      (163)  non-controlling interest           155       (190)
                                       Comprehensive income/(loss)
                                       attributable to Royal Dutch
        2,487     (13,216)    (4,937)  Shell plc shareholders            (811)     2,692

Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated Financial Statements.


   
    CONDENSED CONSOLIDATED BALANCE SHEET
                                                              $ million
                                            Dec 31, 2015     Sep 30, 2015     Dec 31, 2014

    Assets
    Non-current assets:
    Intangible assets                              6,283            6,300            7,076
    Property, plant and equipment                182,838          181,681          192,472
    Joint ventures and associates                 30,150           30,940           31,558
    Investments in securities                      3,416            3,573            4,115
    Deferred tax[1]                               11,033           10,258            8,131
    Retirement benefits                            4,362            2,366            1,682
    Trade and other receivables                    8,717            8,331            8,304
                                                 246,799          243,449          253,338

    Current assets:
    Inventories                                   15,822           19,276           19,701
    Trade and other receivables                   45,784           49,130           58,470
    Cash and cash equivalents                     31,752           31,846           21,607
                                                  93,358          100,252           99,778

    Total assets                                 340,157          343,701          353,116

    Liabilities
    Non-current liabilities:
    Debt                                          52,849           50,438           38,332
    Trade and other payables                       4,528            4,510            3,582
    Deferred tax[1]                                8,976            9,935           12,052
    Retirement benefits                           12,587           14,557           16,318
    Decommissioning and other
    provisions                                    26,148           25,110           23,834
                                                 105,088          104,550           94,118

    Current liabilities:
    Debt                                           5,530            5,149            7,208
    Trade and other payables                      52,770           55,230           64,864
    Taxes payable                                  8,233           10,378            9,797
    Retirement benefits                              350              359              377
    Decommissioning and other
    provisions                                     4,065            5,553            3,966
                                                  70,948           76,669           86,212

    Total liabilities                            176,036          181,219          180,330

    Equity attributable to Royal Dutch
    Shell plc shareholders                       162,876          161,348          171,966

    Non-controlling interest                       1,245            1,134              820
    Total equity                                 164,121          162,482          172,786

    Total liabilities and equity                 340,157          343,701          353,116

[1] Deferred tax assets increased and deferred tax liabilities decreased in 2015 primarily as a result of the impairments described in Note 2.

Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated Financial Statements.


   
    CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                     Equity attributable to Royal Dutch Shell plc shareholders
                          Shares
                   Share  held in  Other   Retained               Non-controlling   Total
      $ million   capital  trust  reserves earnings     Total        interest      equity
    At January 1,
    2015              540 (1,190) (14,365)  186,981    171,966            820     172,786
    Comprehensive
    income/(loss)
    for the
    period              -      -   (2,750)    1,939       (811)           155        (656)
    Capital
    contributions
    from, and
    other changes
    in,
    non-controlli
    ng interest         -      -        -       501        501            387         888
    Dividends
    paid                -      -        -   (11,972)   (11,972)          (117)    (12,089)
    Scrip
    dividends[1]        7      -       (7)    2,602      2,602              -       2,602
    Repurchases
    of shares[2]       (1)     -        1         1          1              -           1
    Shares held
    in trust:
    net sales and
    dividends
    received            -    606        -        70        676              -         676
    Share-based
    compensation        -      -      (65)      (22)       (87)             -         (87)
    At December
    31, 2015          546   (584) (17,186)  180,100    162,876          1,245     164,121

    At January 1,
    2014              542 (1,932)  (2,037)  183,474    180,047          1,101     181,148
    Comprehensive
    income/(loss)
    for the
    period              -      -  (12,182)   14,874      2,692           (190)      2,502
    Capital
    contributions
    from, and
    other changes
    in,
    non-controlli
    ng interest         -      -        -       727        727             25         752
    Dividends
    paid                -      -        -   (11,843)   (11,843)          (116)    (11,959)
    Scrip
    dividends[1]        6      -       (6)    2,399      2,399              -       2,399
    Repurchases
    of shares          (8)     -        8    (2,787)    (2,787)             -      (2,787)
    Shares held
    in trust:
    net sales and
    dividends
    received            -    742        -       107        849              -         849
    Share-based
    compensation        -      -     (148)       30       (118)             -        (118)
    At December
    31, 2014          540 (1,190) (14,365)  186,981    171,966            820     172,786

[1] Under the Scrip Dividend Programme some 96.3 million A shares, equivalent to $2.6 billion, were issued during 2015 and some 64.6 million A shares, equivalent to $2.4 billion, were issued during 2014.

[2] Share repurchases in January 2015 were offset by repurchase commitments accrued at December 31, 2014. The share buyback programme was suspended in February 2015.

Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated Financial Statements.


   
    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
             Quarters                          $ million                       Full year
     Q4 2015   Q3 2015  Q4 2014                                              2015     2014

                                 Cash flow from operating activities
         942    (7,393)     418  Income/(loss) for the period               2,200   14,730
                                 Adjustment for:
       1,212     1,146    2,330  - Current taxation                         7,058   13,757
         405       426      375  - Interest expense (net)                   1,529    1,598
                                 - Depreciation, depletion and
       5,281    12,156    4,991  amortisation                              26,714   24,499
                                 - Net losses/(gains) on sale of
      (1,108)     (493)    (972) non-current assets and businesses         (3,460)  (3,212)
                                 - Decrease/(increase) in working
       1,598     5,883    6,124  capital                                    5,521    6,405
                                 - Share of loss/(profit) of joint
        (793)     (193)    (818) ventures and associates                   (3,527)  (6,116)
                                 - Dividends received from joint
       1,440     1,039    1,531  ventures and associates                    4,627    6,902
                                 - Deferred taxation, retirement
                                 benefits, decommissioning

      (1,827)   (2,407)  (1,705) and other provisions                      (5,827)  (1,720)
          (3)    2,302    1,000  - Other[1]                                 2,648    2,500
                                 Net cash from operating activities
       7,147    12,466   13,274 (pre-tax)                                  37,483   59,343

      (1,724)   (1,235)  (3,666) Taxation paid                             (7,673) (14,299)

       5,423    11,231    9,608  Net cash from operating activities        29,810   45,044

                                 Cash flow from investing activities
      (7,299)   (6,412)  (8,831) Capital expenditure[2]                   (26,131) (31,676)
                                 Investments in joint ventures and
          (5)     (274)     107  associates                                  (896)  (1,426)
                                 Proceeds from sale of property, plant
       1,398       913    2,245  and equipment and businesses               4,720    9,873
                                 Proceeds from sale of joint ventures
          26        81      279  and associates                               276    4,163
          91        82       56  Interest received                            288      174
        (397)     (108)    (536) Other[2]                                    (664)    (765)
      (6,186)   (5,718)  (6,680) Net cash used in investing activities    (22,407) (19,657)

                                 Cash flow from financing activities
                                 Net increase/(decrease) in debt with
          (9)   (1,394)    (173) maturity period within three months         (586)  (3,332)
       5,213     5,490    4,001  Other debt: New borrowings                21,500    7,778
      (1,818)   (1,387)    (571) Repayments                                (6,023)  (4,089)
        (484)     (532)    (310) Interest paid                             (1,742)  (1,480)
         177         2    1,002  Change in non-controlling interest           598      989
                                 Cash dividends paid to:
      (1,782)   (2,362)  (2,987) - Royal Dutch Shell plc shareholders      (9,370)  (9,444)
         (45)      (27)     (39) - Non-controlling interest                  (117)    (116)
           -         -     (971) Repurchases of shares                       (409)  (3,328)
                                 Shares held in trust: net
                                 sales/(purchases) and dividends
           7        (1)     (29) received                                     (39)     232
       1,259      (211)     (77) Net cash used in financing activities      3,812  (12,790)

                                 Currency translation differences
                                 relating to cash and
        (590)     (437)    (271) cash equivalents                          (1,070)    (686)
                                 Increase/(decrease) in cash and cash
         (94)    4,865    2,580  equivalents                               10,145   11,911

                                 Cash and cash equivalents at beginning
      31,846    26,981   19,027  of period                                 21,607    9,696

                                 Cash and cash equivalents at end of
      31,752    31,846   21,607  period                                    31,752   21,607

[1] In 2015, this mainly related to well write-offs.

[2] Reflects a minor change to definition with effect from 2015 which has no overall impact on net cash used in investing activities. Comparative information has been reclassified.

Notes 1 to 6 are an integral part of these unaudited Condensed Consolidated Financial Statements.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of preparation

These unaudited Condensed Consolidated Financial Statements of Royal Dutch Shell plc and its subsidiaries (collectively referred to as Shell) have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union and as issued by the International Accounting Standards Board and on the basis of the same accounting principles as, and should be read in conjunction with, the Annual Report and Form 20-F for the year ended December 31, 2014 (pages 111 to 116) as filed with the U.S. Securities and Exchange Commission.

The financial information presented in these Condensed Consolidated Financial Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006. Statutory accounts for the year ended December 31, 2014 were published in Shell's Annual Report and a copy was delivered to the Registrar of Companies in

England
and
Wales
. The auditors' report on those accounts was unqualified, did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.

2. Segment information

Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts.

Information by business segment:


   
         Quarters                   $ million                   Full year
      Q4 2015   Q4 2014                                       2015      2014
                          Third-party revenue
        6,712    11,251   Upstream                          28,480    45,240
       51,410    81,093   Downstream                       236,384   375,752
           24        30   Corporate                             96       113
       58,146    92,374   Total third-party revenue        264,960   421,105

                          Inter-segment revenue
        5,512     9,429   Upstream                          25,447    47,059
          386       596   Downstream                         1,362     2,294
            -         -   Corporate                              -         -

                          CCS earnings
        (333)     2,645   Upstream[1]                       (5,663)   15,841
        2,502     1,544   Downstream[2]                     10,243     3,411
        (295)      (32)   Corporate                           (425)     (156)
        1,874     4,157   Total CCS earnings                 4,155    19,096

   
         Quarters                    $ million                               Full year
      Q4 2015   Q4 2014                                                   2015      2014
        1,874     4,157   Total CCS earnings                             4,155    19,096
                          Current cost of supplies adjustment:
       (1,122)   (4,336)  Purchases                                     (2,278)   (5,087)
          320     1,251   Taxation                                         646     1,454
                          Share of profit/(loss) of joint ventures and
         (130)     (654)  associates                                      (323)     (733)
          942       418   Income/(loss) for the period                   2,200    14,730

1 Third quarter 2015 Upstream earnings include impairment charges of $3,689 million after taxation, primarily related to

North America
shale gas properties, and the impact of the decisions to cease
Alaska
drilling activities for the foreseeable future and to cease the Carmon Creek project ($2,584 million and $2,032 million after taxation respectively). Second quarter 2014 Upstream earnings included an impairment charge of $1,943 million after taxation, partly offset by divestment gains of $1,230 million after taxation.

2 First quarter 2014 Downstream earnings included an impairment charge of $2,284 million related to refineries in

Asia
and
Europe
.

3. Share capital

Issued and fully paid


   
                                                              Sterling deferred
                            Ordinary shares of EUR0.07 each        shares
      Number of shares               A                B         of GBP1 each
    At January 1, 2015        3,907,302,393     2,440,410,614            50,000
    Scrip dividends              96,336,688                 -                 -
    Repurchases of shares       (12,717,512)                -                 -
    At December 31, 2015      3,990,921,569     2,440,410,614            50,000

    At January 1, 2014        3,898,011,213     2,472,839,187            50,000
    Scrip dividends              64,568,758                 -                 -
    Repurchases of shares       (55,277,578)      (32,428,573)                -
    At December 31, 2014      3,907,302,393     2,440,410,614            50,000

Nominal value


   
                                          Ordinary shares of EUR0.07 each
            $ million                         A                 B              Total
    At January 1, 2015                       334               206               540
    Scrip dividends                            7                 -                 7
    Repurchases of shares                     (1)                -                (1)
    At December 31, 2015                     340               206               546

    At January 1, 2014                       333               209               542
    Scrip dividends                            6                 -                 6
    Repurchases of shares                     (5)               (3)               (8)
    At December 31, 2014                     334               206               540
    The total nominal value of sterling deferred shares is less than $1 million.

At Royal Dutch Shell plc’s Annual General Meeting on May 19, 2015, the Board was authorised to allot ordinary shares in Royal Dutch Shell plc, and to grant rights to subscribe for or to convert any security into ordinary shares in Royal Dutch Shell plc, up to an aggregate nominal amount of €147 million (representing 2,100 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 19, 2016, and the end of the Annual General Meeting to be held in 2016, unless previously renewed, revoked or varied by Royal Dutch Shell plc in a general meeting.

4. Other reserves


   
                                        Share                         Accumulated
                                       premium   Capital                 other
                             Merger    reserve  redemption Share plan comprehensi
          $ million        reserve[1]    [1]    reserve[2]   reserve    ve income   Total
    At January 1, 2015          3,405      154         83      1,723    (19,730)  (14,365)
    Other comprehensive
    income/(loss)
    attributable to Royal
    Dutch Shell plc
    shareholders                    -        -          -          -     (2,750)   (2,750)
    Scrip dividends                (7)       -          -          -          -        (7)
    Repurchases of shares           -        -          1          -          -         1
    Share-based
    compensation                    -        -          -        (65)         -       (65)
    At December 31, 2015        3,398      154         84      1,658    (22,480)  (17,186)

    At January 1, 2014          3,411      154         75      1,871     (7,548)   (2,037)
    Other comprehensive
    income/(loss)
    attributable to Royal
    Dutch Shell plc
    shareholders                    -        -          -          -    (12,182)  (12,182)
    Scrip dividends                (6)       -          -          -          -        (6)
    Repurchases of shares           -        -          8          -          -         8
    Share-based
    compensation                    -        -          -       (148)         -      (148)
    At December 31, 2014        3,405      154         83      1,723    (19,730)  (14,365)

[1] The merger reserve and share premium reserve were established as a consequence of Royal Dutch Shell plc becoming the single parent company of Royal Dutch Petroleum Company and The "Shell" Transport and Trading Company, p.l.c., now The Shell Transport and Trading Company Limited, in 2005.

[2] The capital redemption reserve was established in connection with repurchases of shares of Royal Dutch Shell plc.

5. Derivative contracts

The table below provides the carrying amounts of derivatives contracts held, disclosed in accordance with IFRS 13 Fair Value Measurement.




            $ million                           Dec 31, 2015    Sep 30, 2015    Dec 31, 2014
    Included within:   
   
    Trade and other receivables – non-current            744             885            703
    Trade and other receivables – current             13,114          12,433         14,037
    Trade and other payables – non-current             1,687           1,407            520
    Trade and other payables – current                10,757           9,892         11,554

As disclosed in the Consolidated Financial Statements for the year ended December 31, 2014, presented in the Annual Report and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at December 31, 2015 are consistent with those used in the year ended December 31, 2014, and the carrying amounts of derivative contracts measured using predominantly unobservable inputs have not changed materially since that date.

The fair value of debt excluding finance lease liabilities at December 31, 2015, was $53,480 million (September 30, 2015: $50,744 million; December 31, 2014: $41,120 million). Fair value is determined from the prices quoted for those securities.

6. Recommended cash and share offer for BG Group plc by Royal Dutch Shell plc

On April 8, 2015, the Boards of Royal Dutch Shell plc and BG Group plc announced that they had reached agreement on the terms of a recommended cash and share offer to be made by Royal Dutch Shell plc for the entire issued and to be issued share capital of BG Group plc.

The shareholders of Royal Dutch Shell plc and BG Group plc voted to approve the transaction at meetings on January 27, 2016 and January 28, 2016 respectively. The transaction is expected to complete on February 15, 2016, subject to the satisfaction or waiver of certain customary conditions, including the sanction of the scheme arrangement to implement the combination by the High Court of Justice.

Under certain circumstances occurring on or prior to July 31, 2016, Royal Dutch Shell plc has agreed to pay BG Group plc £750 million by way of compensation for any loss suffered by BG Group plc in connection with the preparation and negotiation of the transaction.

ADDITIONAL NOTES FOR INFORMATION

A. Impacts of accounting for derivatives

In the ordinary course of business Shell enters into contracts to supply or purchase oil and gas products as well as power and environmental products. Derivative contracts are entered into for mitigation of resulting economic exposures (generally price exposure) and these derivative contracts are carried at period-end market price (fair value), with movements in fair value recognised in income for the period. Supply and purchase contracts entered into for operational purposes are, by contrast, recognised when the transaction occurs (see also below); furthermore, inventory is carried at historical cost or net realisable value, whichever is lower.

As a consequence, accounting mismatches occur because: (a) the supply or purchase transaction is recognised in a different period; or (b) the inventory is measured on a different basis.

In addition, certain

UK
gas contracts held by Upstream are, due to pricing or delivery conditions, deemed to contain embedded derivatives or written options and are also required to be carried at fair value even though they are entered into for operational purposes.

The accounting impacts of the aforementioned are reported as identified items in this Report.

B. Capital investment

Capital investment is a measure used to make decisions about allocating resources and assessing performance. It is defined as the sum of capital expenditure, exploration expense (excluding well write-offs), new investments in joint ventures and associates, new finance leases and other adjustments.

C. Divestments

Divestment proceeds comprise proceeds from sale of property, plant and equipment and businesses, joint ventures and associates, and other Upstream and Downstream investments, adjusted onto an accruals basis.

The term "Divestments" comprises both divestment proceeds as defined above and proceeds from sale of interests in Shell Midstream Partners, L.P. ("SMP"). Proceeds from sale of interests in SMP are included within "Change in non-controlling interest" in the Condensed Consolidated Statement of Cash Flows.

D. Return on average capital employed

Return on average capital employed (ROACE) measures the efficiency of Shell's utilisation of the capital that it employs and is a common measure of business performance. In this calculation, ROACE is defined as the sum of income for the current and previous three quarters, adjusted for after-tax interest expense, as a percentage of the average capital employed for the same period. The tax rate used is Shell's effective tax rate for the period. Capital employed consists of total equity, current debt and non-current debt.

E. Gearing

Gearing, calculated as net debt (total debt less cash and cash equivalents) as a percentage of total capital (net debt plus total equity), is a key measure of Shell's capital structure.

F. Operating costs

Operating costs comprise production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses.

G. Liquidity and capital resources

Fourth quarter net cash from operating activities was $5.4 billion compared with $9.6 billion for the same period last year.

Total current and non-current debt increased to $58.4 billion at December 31, 2015 from $55.6 billion at September 30, 2015 while cash and cash equivalents were $31.8 billion at December 31, 2015, in line with the position at September 30, 2015. During the fourth quarter 2015, Shell issued $5.0 billion of debt under the US shelf registration. No new debt was issued under the European medium-term note programme.

Capital investment for the fourth quarter 2015 was $7.9 billion, of which $5.8 billion in Upstream, $2.0 billion in Downstream and $0.1 billion in Corporate. Capital investment for the same period last year was $9.7 billion, including $7.5 billion in Upstream and $2.1 billion in Downstream.

Dividends of $0.47 per share are announced on February 4, 2016 in respect of the fourth quarter. These dividends are payable on March 29, 2016. In the case of B shares, the dividends will be payable through the dividend access mechanism and are expected to be treated as

UK
-source rather than Dutch-source. See the Annual Report and Form 20-F for the year ended December 31, 2014 for additional information on the dividend access mechanism.

Under the Scrip Dividend Programme shareholders can increase their shareholding in Shell by choosing to receive new shares instead of cash dividends. Only new A shares will be issued under the Programme, including to shareholders who currently hold B shares.

Full year net cash from operating activities was $29.8 billion compared with $45.0 billion last year.

Total current and non-current debt increased to $58.4 billion at December 31, 2015 from $45.5 billion at December 31, 2014 while cash and cash equivalents increased to $31.8 billion at December 31, 2015 from $21.6 billion at December 31, 2014. During 2015 Shell issued $15.0 billion of debt under the US shelf registration, and $5.2 billion of debt under the European medium-term note programme.

Capital investment for 2015 was $28.9 billion, of which $23.6 billion in Upstream, $5.1 billion in Downstream and $0.2 billion in Corporate. Capital investment for 2014 was $37.3 billion, of which $31.3 billion in Upstream, $5.9 billion in Downstream and $0.1 billion in Corporate.

CAUTIONARY STATEMENT  

The release, presentation, publication or distribution of this announcement in jurisdictions other than the

United Kingdom
may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the
United Kingdom
should inform themselves about and observe any applicable requirements. Any failure to comply with applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction.

This announcement is not intended to and does not constitute or form part of any offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the recommended combination of Royal Dutch Shell plc ("Shell") and BG Group plc ("BG") (the "Combination") or otherwise nor shall there be any sale, issuance or transfer of securities of Shell or BG pursuant to the Combination in any jurisdiction in contravention of applicable laws.

All amounts shown throughout this announcement are unaudited. All peak production figures in Portfolio Developments are quoted at 100% expected production.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this announcement "Shell", "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. "Subsidiaries", "Shell subsidiaries" and "Shell companies" as used in this announcement refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Companies over which Shell has joint control are generally referred to as "joint ventures" and companies over which Shell has significant influence but neither control nor joint control are referred to as "associates". The term "Shell interest" is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.

This announcement contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell and of the Combination. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell, BG and the combined group to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "goals", "intend", "may", "objectives", "outlook", "plan", "probably", "project", "risks", "schedule", "seek", "should", "target", "will" and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell's products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell's Form 20-F for the year ended December 31, 2014 (available at http://www.shell.com/investor and http://www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, February 4, 2016. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

This Report contains references to Shell's website. These references are for the readers' convenience only. Shell is not incorporating by reference any information posted on http://www.shell.com

We may have used certain terms, such as resources, in this announcement that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website http://www.sec.gov. You can also obtain this form from the SEC by calling 1-800-SEC-0330.

February 4, 2016

The information in this Report reflects the unaudited consolidated financial position and results of Royal Dutch Shell plc. Company No. 4366849, Registered Office: Shell Centre,

London
, SE1 7NA,
England
,
UK
.

Contacts:

- Investor Relations: International +31-(0)70-377-4540;

North America
+1-832-337-2034

- Media: International +44-(0)207-934-5550;

USA
+1-713-241-4544

SOURCE Royal Dutch Shell plc

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Source: Equities.com News (February 3, 2016 - 6:48 PM EST)

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