Royal Dutch Shell plc announced the launch of a $25 billion share buyback program on Thursday.
“Today, Shell starts a share buyback program of at least $25 billion in the period 2018-2020, subject to further progress with debt reduction and oil price conditions,†the company said in a statement on its website.
“In the first tranche of this program Shell enters into an irrevocable, non-discretionary arrangement to enable the purchase of A ordinary shares and/or B ordinary shares up to the maximum aggregate consideration of $2 billion over a period of 3 months,†the statement added.
Ben van Beurden, Shell’s CEO, said the company’s free cash flow outlook, and the progress it has made to strengthen its balance sheet, gave the company the “confidence†to start its share buyback program.
In its latest financial results statement released Thursday, Shell reported free cash flow of $9.5 billion in the second quarter, compared to $5.1 billion in the first quarter and $12.1 billion in 2Q 2017. In 2Q, the company recorded $4.7 billion earnings on a current cost of supplies basis, excluding identified items. This figure stood at $5.4 billion in 1Q and $3.6 billion in 2Q 2017.
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