The Wall Street Journal: Shell Adjusts 1Q Net Income $226M Higher To $4.7B

DOW JONES NEWSWIRES

July 13, 2004

Edited Press Release

LONDON -- The Royal Dutch/Shell Group of Companies said Tuesday that due to a change in accounting principle for inventories, previously reported net income for the first quarter is up by $226 million to $4.7 billion.

The schedule also includes updated quarterly production figures. As per the 2003 annual reports and accounts and 2003 Form 20-F, production figures were restated to eliminate certain cash paid royalties in Canada, with the effect reduction in production of 9 million barrels of oil equivalent in 2003, Shell said.

Oil sands production is shown separately on the schedule.

The company said that it has placed on its website a quarterly breakdown of previously disclosed financial restatements for the four quarters of 2003 and the first quarter of 2004.

Shell published the information to give investors further clarity with respect to the quarterly effects of the 2003 annual restatement that was disclosed in May and in recent regulatory filings, it said.

Future quarterly results will incorporate the changes to the accounting policies announced in the regulatory release on May 24, 2004. Earnings on a Current Cost of Supplies (CCS) basis will continue to be advised.

The quarterly restatements for 2003 are consistent with the 2003 annual reports and accounts and 2003 Form 20-F and reflect the financial impact of the proved reserves restatement, the change in accounting principle for inventories, the change in treatment of exploration costs and the change in treatment of certain gas contracts.

As previously disclosed in the 2003 annual report and accounts and 2003 Form 20-F, the restatement reduced 2003 net income by $203 million.