THE WALL STREET JOURNAL/DOW JONES NEWSWIRES: S&P Places Shell Canada On CW Neg On Parent Actions: “The CreditWatch placements of both Royal Dutch/Shell and Shell Canada follow the Royal Dutch/Shell's announcement that it is considering an additional downward adjustment of 900 million barrels of oil equivalent (boe) to its 14.35 billion boe of proven reserves. The overall revision would represent a 6.3% reduction in Royal Dutch/Shell's current proved reserves base and would be in addition to the 23% aggregate recategorizations already implemented in the first half of 2004.” (ShellNews.net)
DOW JONES NEWSWIRES
Posted 30 Oct 04
The following is a press release from Standard & Poor's:
TORONTO (Standard & Poor's) Oct. 29, 2004--Standard & Poor's Ratings Services today said it placed its long-term 'AA' corporate credit and senior unsecured debt ratings on Shell Canada Ltd. on CreditWatch with negative implications following a similar action taken on the ratings of its major shareholder, the Royal Dutch/Shell Group of Companies (Royal Dutch/Shell). At the same time, Standard & Poor's affirmed its short-term 'A-1+' global scale and long-term 'A-1 (High)' Canadian CP ratings on the company.
The CreditWatch placements of both Royal Dutch/Shell and Shell Canada follow the Royal Dutch/Shell's announcement that it is considering an additional downward adjustment of 900 million barrels of oil equivalent (boe) to its 14.35 billion boe of proven reserves. The overall revision would represent a 6.3% reduction in Royal Dutch/Shell's current proved reserves base and would be in addition to the 23% aggregate recategorizations already implemented in the first half of 2004.
"While the negative reserve revisions announced at Royal Dutch/Shell have no implications for Shell Canada's proven reserves base, Shell Canada's ratings are directly linked to those of the Royal Dutch/Shell ratings. As a result, any rating action taken at the Group level will affect the ratings on Shell Canada," said Standard & Poor's credit analyst Michelle Dathorne. "We do not expect to see reserve revisions related to the latest Group announcement reported at the Shell Canada level," Ms. Dathorne added.
Standard & Poor's will resolve the CreditWatch status of all ratings when Royal Dutch/Shell provides definitive results from its review of the proved reserves base, expected in early 2005. Standard & Poor's will focus on past and present procedures for proved-reserve booking at the Group level, key areas of operations, specific projects that led to the adjustment warning, and the effect of another possible reserves recategorization on the Group's long-term production profile and related capital-spending needs. Standard & Poor's will also examine corporate governance issues, factoring in the Group's simplified corporate structure achieved through the full merger of Royal Dutch/Shell's top Dutch and U.K. holding companies.