Chief Executive Officer Ben van Beurden commented: “Today we are taking another important step towards the delivery of our world-class investment case, with the launch of a $25 billion share buyback programme.
Our financial framework remains unchanged. Our free cash flow outlook and the progress we have made to strengthen our balance sheet give us the confidence to start our share buyback programme.
Our intention remains to buy back at least $25 billion of our shares over the period 2018-2020, subject to further progress with debt reduction and oil price conditions.”
The maximum number of ordinary shares which may be purchased by the company under the buyback programme is 834 million, which is the maximum pursuant to the authority granted by shareholders at the company's 2018 Annual General Meeting1.
In the first tranche of this buyback programme (the ‘initial programme’) the company has entered into an irrevocable, non-discretionary arrangement with a broker to enable the purchase of A ordinary shares and/or B ordinary shares up to and including October 25, 2018. The aggregate maximum consideration for the purchase of A ordinary shares and B ordinary shares under the initial programme is $2 billion. The shares bought back under the initial programme will be whichever of the A ordinary shares and/or B ordinary shares is economically the least expensive on a given trading day.
The broker will make its trading decisions in relation to the company's securities independently of the company. The initial programme will be carried out on the London Stock Exchange and/or on CBOE Europe Equities and will be effected within certain pre-set parameters. It will be conducted in accordance with the company's general authority to repurchase shares granted by its shareholders at the company’s Annual General Meeting held on May 22, 20181, and in line with Chapter 12 of the Listing Rules, Article 5 of the Market Abuse Regulation 596/2014/EU dealing with buyback programmes and the Commission Delegated Regulation (EU) 2016/1052.
The purpose of the initial programme is to reduce the issued share capital of the company to offset the number of shares issued under the Scrip Dividend Programme and to significantly reduce the equity issued in connection with the company’s combination with BG Group. All shares repurchased as part of the initial programme will be cancelled.
Any further tranches of the buyback programme, which may be conducted after completion of the initial programme, will be announced in due course.
1 The existing shareholder authority to buy back shares granted at the company's 2018 Annual General Meeting expires at the earlier of the close of business on August 22, 2019, and the end of the date of the company's 2019 Annual General Meeting. The company expects to seek renewal of shareholder authority to buy back shares at subsequent Annual General Meetings.