Shell to Book Up to $3 Billion of 2Q Impairments; Upstream Production Fell on Quarter -- 2nd Update
July 07 2023 - 3:54AM
Dow Jones News
By Christian Moess Laursen
Shell said Friday that it expects to book after-tax impairments
of up to $3 billion for the second quarter of 2023, and that
upstream production declined from the first three months of the
year.
The energy major said it expects to pay post-tax impairments of
up to $3 billion, largely due to a 1% increase in the discount rate
used for impairment testing.
Shell said it expects to report that upstream production fell to
1.7 million-1.8 million barrels of oil equivalent a day in the
second quarter from 1.9 million BOE a day in the first quarter. The
decline is a reflection of scheduled maintenance, including assets
in the Gulf of Mexico, Norway, Malaysia and Brazil, it said.
In its integrated gas division, the company's production in the
quarter was in the range of 950,000-990,000 BOE a day compared with
970,000 BOE a day in the first quarter, it said. The unit's
liquefied natural gas liquefaction volumes were 6.9 million-7.3
million metric tons, compared with 7.3 million tons, it said.
Trading in the unit is expected to be significantly lower
compared with a strong preceding quarter due to seasonality and
fewer optimization opportunities, Shell said.
In the market division, Shell said it expects to report sales
volumes between 2.4 million and 2.8 million barrels per day,
compared with 2.45 million in the first quarter.
The company is guiding for a working capital gain between $2
billion and $6 billion, compared with a working capital requirement
of $800,000 in the prior-quarter. This should help net debt decline
quarter-on-quarter, which should give investors confidence around
Shell's statements on at least $5 billion buybacks in the second
half-year, RBC Capital Markets analyst Biraj Borkhataria said in a
research note.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
July 07, 2023 03:39 ET (07:39 GMT)
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