Business Context and Reporting Period
This Form 6-K filing by Royal Dutch Shell plc (Shell) dated February 15, 2016, announces the effective completion of the Scheme of Arrangement to acquire BG Group plc (BG). Following court sanction on February 11, 2016, and the delivery of the Court Order on February 15, 2016, Shell now owns the entire issued ordinary share capital of BG.
Key Financial Metrics and Capital Structure
The filing details the capital restructuring resulting from the acquisition but does not provide consolidated revenue, profit, or cash flow figures for a specific reporting period.
- Share Issuance: Shell issued 1,523,804,425 New Shell Shares (218,728,308 Shell A shares and 1,305,076,117 Shell B shares).
- Total Share Capital: Post-acquisition, Shell's capital consists of 4,209,649,877 Shell A shares and 3,745,486,731 Shell B shares, totaling 7,955,136,608 shares in issue.
- Treasury Shares: Shell holds no ordinary shares in treasury.
- Consideration Details: Default consideration for Scheme Shareholders was 0.4454 New Shell Shares and 383 pence in cash per Scheme Share.
- Mix and Match Facility: Approximately 17.11% of Scheme Shares were subject to Mix and Match Elections. Cash Elections were satisfied in full at 1036.87 pence per share. Share Elections were scaled down by approximately 26.56% on a pro rata basis.
Material Changes Versus Prior Period
The primary material change is the full ownership of BG Group, significantly altering Shell's asset base and share count.
- Asset Acquisition: Shell acquired productive oil and gas projects in Brazil, Australia, and other key countries.
- Trading Status: Admission of BG Shares to the London Stock Exchange was cancelled effective February 15, 2016. New Shell Shares were admitted to trading on the London Stock Exchange and Euronext Amsterdam on February 15 and 16, 2016, respectively.
- Share Count Increase: The total number of Shell shares in issue increased to accommodate the BG acquisition.
Guidance, Outlook, and Risks
Management Commentary: CEO Ben van Beurden stated the acquisition significantly boosts reserves and production, providing a large injection to cash flow. The company aims to shape a simpler, leaner, and more competitive entity focusing on deep water and LNG expertise.
Risks and Contingencies: The filing includes extensive forward-looking statement disclaimers. Key risks identified include:
- Price fluctuations in crude oil and natural gas.
- Currency fluctuations and economic/financial market conditions.
- Drilling and production results and reserves estimates.
- Political risks, including expropriation and contract renegotiation with governmental entities.
- Regulatory developments regarding climate change and sanctions.
- Integration risks associated with the acquisition.
Unusual Items: The filing notes that the ability to satisfy Cash and Share Elections under the Mix and Match Facility was dependent on other shareholders making equal and opposite elections, resulting in a pro rata scale-down of Share Elections.
Important Facts for Investor Verification
- Verify the exact number of New Shell Shares issued (1,523,804,425) and the resulting total share count (7,955,136,608) for dilution calculations.
- Confirm the settlement dates for New Shell Shares on the London Stock Exchange (February 15, 2016) and Euronext Amsterdam (February 16, 2016).
- Review the specific terms of the Mix and Match Facility, particularly the 26.56% scale-down applied to Share Elections.
- Assess the impact of the acquisition on Shell's reserves and production profiles as described by management.
- Monitor the integration progress of BG's assets in Brazil and Australia against the stated strategic focus on deep water and LNG.