Shell updates market on second-quarter outlook

(Sharecast News) - Shell updated the market on its second-quarter outlook on Friday, highlighting varied performance across its segments. In the integrated gas segment, production was anticipated between 940,000 and 980,000 barrels of oil equivalent per day, with LNG liquefaction volumes expected to range from 6.8 to 7.2 million tonnes .

The underlying operating expenses (opex) were projected at $1bn to $1.2bn, while pre-tax depreciation was forecast between $1.2bn and $1.6bn.

It said the taxation charge for the segment was estimated at $0.8bn to $1.1bn.

Trading and optimisation results were expected to align with the second quarter of 2023, but show a decline from the first quarter of this year due to seasonal factors.

The upstream segment was expected to see production levels between 1,720 and 1,820 thousand barrels of oil equivalent per day (kboe/d).

Underlying opex was projected to be between $2.1bn and $2.7bn, and pre-tax depreciation was estimated at $2.5bn to $2.9bn.

The taxation charge was anticipated to range from $1.8bn to $2.6bn.

Additionally, a profit/loss share from joint ventures and associates of around $0.2bn and exploration well write-offs of the same amount were expected.

Marketing segment sales volumes were projected to be between 2,700 and 3,100 thousand barrels per day (kb/d), with underlying opex ranging from $2.5bn to $2.9bn.

Pre-tax depreciation was expected between $0.3bn and $0.7bn, and the taxation charge was estimated at $0.2bn to $0.5bn.

Marketing results were anticipated to remain consistent with the first quarter of 2024.

In chemicals and products, the indicative refining margin was set at $8 per barrel, while the indicative chemicals margin was forecast at $155 per tonne.

Chemicals sub-segment adjusted earnings were expected to be near break-even.

Refinery utilisation is projected at 91% to 95%, and chemicals utilisation was estimated at 78% to 82%.

Underlying opex was expected to range from $1.9bn to $2.3bn, with pre-tax depreciation between $0.7bn and $0.9bn.

The taxation charge was forecast between $0.1bn and $0.5bn, while trading and optimisation results were expected to remain in line with the first quarter.

Shell said the renewable and energy solutions segment forecast adjusted earnings between -$0.5bn and $0.1bn, while the corporate segment expected adjusted earnings from -$0.7bn to -$0.5bn.

For the Shell Group, total tax paid was anticipated to range from $3.1bn to $3.9bn.

Derivative movements and working capital were projected between -$2bn to $2bn each, reflecting significant uncertainty.

Non-cash post-tax impairments of $1.5bn to $2bn were expected, primarily from Singapore chemicals and products assets and Rotterdam HEFA, reported in the marketing segment.

Consensus on quarterly adjusted earnings and adjusted EBITDA per reporting segment, along with cash flow from operations (CFFO) at the group level, was expected from Vara Research on 25 July.

Shell said the final results, due on 1 August, remained subject to adjustments.

At 0850 BST, shares in Shell were down 0.1% at 2,897p.

Reporting by Josh White for Sharecast.com.