Shell beats expectations as strong gas sales offset weak refining

Shell (NYSE: SHEL) reported better-than-expected third-quarter earnings on Thursday as strong performance from its gas division offset weak downstream margins in its midstream business.

Despite lower oil prices and lower refining margins, Shell booked adjusted earnings were $6.0 billion, above analysts’ consensus estimate of $5.4 billion and only slightly below earnings of $6.2 billion in the same 2023 period.

Shell warned earlier this month that it expected weaker refining margins and losses in its chemicals business to weigh on its third-quarter earnings. This could be offset or partially offset by higher LNG production, Shell said in its third-quarter report.

Increased liquefaction volumes and LNG sales have boosted earnings at its Integrated Gas division, results from Shell, the world’s largest LNG trader, showed today.

Amid lower crude oil prices and refining margins in the third quarter, consensus-beating earnings “reflect strong operating performance in the integrated gas, exploration and production and marketing businesses,” SuperMajor said.

Based on the third quarter results, Shell initiated a new $3.5 billion share repurchase program, which is expected to be completed in time for the 2024 fourth quarter results announcement. Over the past 4 quarters, total distributions to shareholders amounted to 43% of cash flow from operations (CFFO).

“We continue to deliver more value with fewer emissions, while strengthening the strength of our balance sheet. Today we are announcing another $3.5 billion buyback program over the next three months, making this the 12th consecutive quarter in which we have announced buybacks of $3.5 billion or more,” the CEO said. director Wael Sawan.

Following the results, Shell shares rose 1.5% at the opening of trading in London.

Earlier this week, another major British company, BP (New York Stock Exchange: BP) also recorded third-quarter profit above analysts’ expectations, although profit was lower than a year earlier and the second quarter amid weaker oil prices and weak refining margins.

Compared to the second quarter of 2024, the profit reflected “lower realized refining margins, weak crude oil trading results and lower liquids sales, partially offset by higher gas sales,” BP said in a report. statementadding that gas marketing and trading results were “average”.

Tsvetana Paraskova for Oilprice.com

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