Shell PLC (LSE:SHEL, NYSE:SHEL) said it expects to generate adjusted earnings of between US$400mln and US$900mln from renewables and its energy solutions businesses for the second quarter, but investors will have to wait a bit longer for guidance on oil and gas earnings.
Earnings guidance for the group will be provided indirectly, based on expert consensus, later this month (July 21), the energy supermajor said. It reported that upstream oil and gas production for the quarter will amount to 1.85mln to 1.95mln barrels of oil equivalent per day (boepd) along with integrated gas production of 0.93mln to 0.98mln boepd.
Some 7.4mln to 8mln tonnes of liquified natural gas (LNG) is expected for the three-month period.
Investors reacted positively to the somewhat cryptic trading update, with Shell shares rising 33.8p to trade at 2,008p in Thursday’s early deals.
At group level, the company said it expected to pay taxes of between US$3.3bn and US$3.7bn for the quarter.
It noted that the company’s US$8.5bn share buy-back programme for the first half of 2022 was completed by July 5.
Shell also noted that it had revised up its own oil price assumptions during the quarter, with its internal model now pitched at an average of US$80 per barrel for the 2023 financial year, which it said would trigger some US$3.5bn to US$4.5bn of previously impaired asset value to be reversed.
It also stated that the upstream business would see an extra US$2.5bn of additional adjusted earnings for every US$10 that the Brent oil price exceeds its assumed price, whilst an extra US$1bn would be generated in the integrated gas unit for every US$10 rise in the Brent oil price.
For reference, Brent this morning traded at just over US$100 per barrel.