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Shell, a major player in the oil and gas industry, has adjusted its outlook for its gas division as it prepares to report on its performance for the first quarter of 2024. In a trading update, the company anticipates a modest target of 960k-1m barrels of oil equivalent (boe/d) per day for the first quarter of 2024. This projection is equivalent to an underlying operating expense ranging between GBP792-951m. Notably, production in the third quarter stood at 901k (boe/d).
While Shell expects its trading and optimization results to be robust, they are anticipated to be "significantly lower" than the GBP1.1bn achieved in the final part of 2023.
Taxation charges are poised to impact key business areas, with the upstream division facing an expected range of GBP1.6-GBP2.2bn in charges.
In terms of profitability, Shell predicts the share of profit or loss of upstream joint ventures and associates for Q1 2024 to be around GBP396m, with approximately GBP475m anticipated write-offs from exploration well projects, primarily in Albania.
The chemicals sub-segment is expected to report lower losses compared to Q4 of the previous year. Moreover, Shell expresses confidence in the trading performance of the division as a whole, projecting it to be "significantly" higher than the end of last year.
However, no update was provided on the expected performance of Shell’s renewables and energy solutions division, which is forecasted to range between a GBP79m loss and a GBP396m profit.
In 2023, the company reported adjusted operating earnings of $28.3bn (GBP22.4bn).
Despite a decline of approximately 40 percent compared to the prior year’s GBP31.6bn in 2022, Shell announced a substantial GBP2.7bn share buyback program. This program is expected to be completed by its first-quarter 2024 results, aiming to reward investors amidst challenging market conditions.
