Royal Dutch Shell PLC, Europe's largest oil company, on Thursday said its first-quarter earnings rose 60 percent to $8.78 billion, thanks to higher oil prices, gains on asset sales and improving refining operations.
Net profit was up from $5.48 billion a year earlier, while revenues rose 28 percent to $110 billion.
Shell said Thursday it produced 3.50 million barrels of oil per day in the quarter, down 2.6 percent from a year ago, due to the sale of assets, notably Shell's share in some developed natural gas fields in Texas.
Without the sales, which contributed $635 million to net profit, production would have been flat, Shell said.
"We continue to make good progress in implementing our strategy; improving near-term performance, delivering a new wave of production growth, and maturing the next generation of growth options for shareholders," Chief Executive Peter Voser said in a statement.
Shares rose 0.7 percent to euro26.225 in early trading in Amsterdam.
"Like BP yesterday, a stronger than expected downstream (refining) performance is the key feature of the results," wrote Evolution Securities analyst Richard Griffith in a note on the earnings. BP PLC, Shell's major European competitor, reported first quarter net profit of $7.2 billion Wednesday.
Griffith said that he expected production to rise in future quarters due to Shell's heavy investment in new capacity.
"Start-up of major upstream (production) projects should see enhanced contributions from this area and enable RDS to continue to outperform its peers," he said, repeating a Buy recommendation on shares.
The company's earnings based on the 'current cost of supplies' — a nonstandard measure which seeks to strip out one-time costs and changes in the price of oil literally in the pipeline — were up 41 percent to $6.93 billion, Shell said.
Production profits were $5.76 billion, up 30 percent, due to the rise in oil prices and asset sales. Global prices were up more than 35 percent from a year earlier, but Shell did not have the full benefit of that: about half of the company's production is from natural gas, and gas prices have not risen as much as oil.
Refining and chemicals sales were up 57 percent to $1.17 billion, on a current cost of supplies basis. Shell said its refining operations benefited from better margins. Demand increased and it used more of its capacity, as the company had less planned and unplanned maintenance of plants.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.