Shell cuts LNG production targets, reveals $1.3bn cashflow hit
By Benjamin Chiou
Date: Wednesday 08 Jan 2025
(Sharecast News) - Oil major Shell has announced that results for the fourth quarter were significantly lower than the preceding three months, as it revealed $700m of well-write offs and a $1.3bn hit to cashflow.
In an update ahead of its actual quarterly results on 30 January, Shell cut its liquefied natural gas production guidance for the three months to 30 December to 6.8-7.2m metric tons, down from earlier estimates of 6.9-7.5m tons. The company said the reduction was due to lower feedgas and fewer cargos due to the timing of liftings.
Production volumes in the integrated gas division for the quarter ended 30 December are expected to be between 880,000 to 920,000, down from 941,000 in the third quarter due to scheduled maintenance at the gas to liquids (GTL) plant based in Ras Laffan, Qatar. Integrated gas results would also see $300m of well write-offs.
In the upstream division, production is tipped to be between 1,790k-1,890k barrels of oil equivalents per day, up from third-quarter output of 1,811k boed at the mid-point and in line with earlier wider guidance of 1,750k-1,950k boepd. The company also announced $400m of well write-offs in upstream.
In the marketing division, sales volumes guidance for the fourth quarter was narrowed to 2,600k-3,000k bpd, from 2,500k-3,050k bpd previously, but results would be lower than the third quarter (2,945k bpd) reflecting "seasonality".
The company also revealed that cash flow from operating activities excluding working capital is expected to include an $1.3bn outflow as a result of the timing of payments of emissions certificates relating to the German Fuel Emissions Trading Act and US Biofuel programmes.
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