Shell (RDS.A) Renews Q4 Outlook, Awaits $1.7-$2.3B Write-Offs

Royal Dutch Shell (LON:RDSa) RDS.A recently provided an update on its fourth-quarter guidance. Let’s delve into some key segmental revisions.

Further, Shell envisioned its post-tax impairment charges between $1.7 billion and $2.3 billion for the fourth quarter. It expects its 2019 cash capital expenditure at the lower end of its previous guided range of $24-29 billion.

Upstream

The upstream production is projected between 2,775 and 2,825 thousand barrels of oil equivalent per day (boe/d). Its year-ago production was 2,809 thousand boe/d. However, Shell had earlier predicted its fourth-quarter 2019 upstream volumes to be 2,650-2,800 thousand boe/d. Compared with the prior-year quarter, the company expects to incur additional $100-$200 million well write-offs for the ongoing quarter due to weaker macro-economic outlook.

Downstream

Shell estimated its fourth-quarter oil product sales in the band of 6,500-7,000 thousand barrels per day. This indicates a 1.36% increase from the year-earlier reported number assuming that the upper end of the estimate will be met.

This Netherlands-based company anticipates its refinery availability between 91% and 93%. In the earlier quarter, Shell successfully divested its SASREF refining joint venture. Consequently, the oil and gas supermajor will see a decline in chemical sales from 4.1 million tons in the fourth quarter of 2018 to 3.4-3.6 million tons in fourth-quarter 2019.

Integrated Gas

The company expects its fourth-quarter LNG liquefaction volumes to expand to 8.8-9.4 million tonnes from its previous year’s quarterly output of 8.78 million tonnes. Moreover, its segmental production is forecast in the 920-970 thousand boe/d band. In the year-earlier period, Shell produced 979 thousand boe/d.

The Zacks Consensus Estimate for fourth-quarter bottom line is predicted to be $1.08 per share.

This Zacks Rank #3 (Hold) player is a global group of energy and petrochemical companies. It is involved in all phases of the petroleum industry from exploration to final processing and delivery. The company is scheduled to release fourth-quarter earnings on Jan 30, 2020. While its peers Chevron (NYSE:CVX) , ExxonMobil (NYSE:XOM) and BP plc (NYSE:BP) plan to release earnings performance around the same time.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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