Shell expects gas production to jump in first quarter

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Shell reported a free cash flow for the period of $9.8bn, only slightly below the $9.9bn reported in the first quarter of 2023.
Four Havas agencies have lost their B Corp status following the holding group’s global Shell win last year.

Oil and gas supermajor Shell has tempered expectations for its gas division heading into reporting season for the first period of 2024.

In a trading update issued to the London markets today, the company said its target is expected to be around 960k-1m barrels of oil equivalent (boe/d) day for the first quarter, equivalent to an underlying operating expense of between £792- 951m. In the third quarter, production was 901k (boe/d).

Trading and optimisation results are “expected to be strong” but “significantly lower” than the £1.1bn delivered in the final part of 2023.

Taxation charges for the group are expected to hit key business areas, with its upstream division facing around £1.6-£2.2bn in charges.

Shell said that the share of profit or loss of upstream joint ventures and associates for the first quarter of 2024 is expected to be around £396m, with around £475m expected write-offs from exploration well projects, mainly in Albania.

Chemicals sub segment losses are expected to be lower than in Q4 last year and the group said it is confident that trading for the division as a whole will be “significantly” higher than the end of last year.

No update was provided on the expected performance of the company’s renewables and energy solutions division, which is forecast to make between a £79m loss and a £396m profit.

Adjusted estimations, produced by Vara Research, are expected to be published on April 25, 2024, and the group’s final first quarter results for 2024 will be released on 2 May.

The update suggested a weaker start for the company in 2023, following a strong result for 2023. The company reported adjusted operating earnings of $28.3bn (£22.4bn)

Despite being down around 40 per cent against the prior year’s $39.9bn (£31.6bn) in 2022, the firm lavished investors with a $3.5bn (£2.7bn) share buyback programme announced, which expected to be completed by its first-quarter 2024 results.

This week, the Anglo-Dutch energy giant began a fightback in the Dutch courts against a 2021 ruling that determined it must reduce its carbon dioxide emissions by 45 per cent within a decade.

 The company is arguing that the finding had no legal basis and should be overturned. A result is expected later this year.

Shell’s share price was down 0.65 per cent as of early morning trading.