Royal Dutch Shell Plc (NYSE:RDS-A) had a strong quarter, led by higher oil prices and a solid production performance which exceeded expectations.
Earnings increased to $4.21 billion, beating street estimates of $4.08 billion. Last year earnings for the quarter stood at $3.82 billion.
Gas and oil production on average increased by 3.11 barrels of oil equivalent a day, a five percent rise. Liquefied-natural-gas sales volumes were up 34% over last year in the same quarter.
Like their major competitors, Shell is increasing its exposure to natural gas, with a goal increasing it to slightly over 50 percent of total production by 2012.
Costs for the quarter beat target goals, coming in at $3.5 billion, a 15 percent gain over projections.
CEO Peter Voser, said the continues on its strategy of divesting of non-core assets, with a goal of increasing sales to $8 billion through 2011.
Approximately 40 percent of capital spending over the next several years will target the Asia Pacific region.
The Obama, Democrat oil moratorium in the Gulf of Mexico, has the most drastic effects on Shell, which has the most oil rigs affected by the drilling ban.
Chief Financial Officer Simon Henry said to investors he estimates a cost of $200 million after taxes for the full year.
With seven rigs shut down during the BP (NYSE:BP) Gulf crisis, Henry said they had a charge of $56 million for the second quarter. Voser has hinted he may attempt to get claim the capital from BP.