Thread regarding Halliburton Co. layoffs

In the first quarter of last year when oil hit its nadir of $27 a barrel, Shell’s cash flow fell to just $700 million. Oil’s fragile recovery since then to around $50 a barrel has helped the sector, but Shell and its peers have also engaged in aggressive efforts to bring down costs so they can survive at lower prices. Shell said that removing its scrip dividend remains a priority that it is working toward.

“We are getting fit for the 40s,” Mr. van Beurden said, referring to a world in which oil prices are below $50 a barrel.

In the first quarter of last year when oil hit its nadir of $27 a barrel, Shell’s cash flow fell to just $700 million. Oil’s fragile recovery since then to around $50 a barrel has helped the sector, but Shell and its peers have also engaged in aggressive efforts to bring down costs so they can survive at lower prices. Shell said that removing its scrip dividend remains a priority that it is working toward.

Cash flow has become an important way to gauge the health of big oil companies during the price downturn because it demonstrates their ability to make dividend payments to investors without taking on new debt.

Hefty, regular dividends are a significant reason that big investors put money in oil companies, which have historically struggled to offer hope of significant share-price growth because of their size. Investors are particularly wary in an era of low oil prices.

At the depths of the oil-price crash, big oil companies took on tens of billions of dollars in debt to help cover dividend payments. Several offer payouts as company shares, known as scrip—a practice that has kept investors happy in the short-term but was widely seen as unsustainable.