THE Shares of Shell plc (NYSE: SHEL) fell in premarket trading after the company said it expects fourth-quarter results from its Integrated Gas division to be significantly lower quarter-over-quarter, due to the impact of expired hedging contracts.
The oil giant reduced its integrated gas production forecast for the quarter, expecting production of 880 to 920 thousand barrels of oil equivalent per day, compared to an earlier forecast of 900 to 960 thousand barrels of oil equivalent per day.
This is down from 941 thousand barrels of oil equivalent per day in the previous quarter. The overhaul follows scheduled maintenance at a facility in Qatar.
The company also adjusted its LNG production forecast, now forecasting between 6.8 and 7.2 million metric tons, compared to an earlier forecast of 6.9 to 7.5 million metric tons.
Compared to 7.5 million metric tons produced in the previous quarter.
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Shell also expects non-cash after-tax writedowns of $1.5 billion to $3 billion and a cash outflow of $1.3 billion related to emissions permit payments. Cash flow impacts come from permitting costs in Germany and the United States.
In October 2024, Shell reported third-quarter revenue of $71.09 billion, beating the consensus estimate of $61.34 billion. The company will report its fourth quarter results on January 30.
On Wednesday, the analyst Morgan StanleyMartijn Rats, upgraded Shell’s stock rating from Equal-Weight to Overweight and raised the price target from $66.50 to $79.80.
Rats said Shell’s financial strength, combined with a favorable valuation, positions it well to weather the energy sector’s current challenges while delivering sustainable returns.
In December, the subsidiaries Equinor ASA et Equinor UK Ltd et Shell UK Ltdsubsidiaries of Shell, have announced plans to merge their UK offshore oil and gas assets to form the largest independent producer in the UK’s North Sea.
Price movement : At last check on Wednesday, before the market opened, Shell shares were down 3% to $63.95.
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