April 26, 2012 / 1:33 PM / 5 years ago

Shell CFO: Wet gas switch will drop 2012 US production

NEW YORK (Reuters) - Royal Dutch Shell Plc (RDSa.L) Chief Financial Officer Simon Henry said on Thursday that in the U.S., the company would be switching the bulk of its drilling program toward the production of "wet" natural gas and away from "dry" natural gas.

As a result of this shift in focus in its U.S. natural gas business, Shell's natural gas production is expected to be lower year-on-year in 2012, but will be higher in 2013, he said during the company's first-quarter 2012 earnings call with analysts.

With the emphasis on wet gas production, Shell will be able to realize higher margins on gas processing, where it can strip out higher-valued natural gas liquids, such as ethane, propane and butane.

Reporting by Jeffrey Kerr; Editing by Gerald E. McCormick

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