Shell Lowers Q1 Production Outlook, Flags Write-Offs And Maintenance

Shell PLC SHEL shares were trading lower in premarket on Monday after the company revised its first-quarter outlook.

For the first quarter, it cut the guidance for production at Integrated Gas to around 910 – 950 thousand boe/d (vs. the prior outlook of 930 – 990 thousand boe/d) due to unplanned maintenance, mainly in Australia.

Also, Shell revised the outlook for Upstream to about 1,790 – 1,890 thousand boe/d (vs. earlier outlook of 1,750 – 1,950 thousand boe/d), reflecting the completion of the SPDC divestment in March 2025.

In the Upstream segment, the company projects a share of profit / (loss) of joint ventures and associates of ~$200 million and exploration well write-offs of ~$0.1 billion in the quarter.

The company now projects Marketing sales volumes of around 2,500 – 2,900 thousand b/d (vs. earlier guidance of 2,500 – 3,000 thousand b/d), reflecting a lower contribution from Sectors & Decarbonisation.

Shell anticipates refinery utilization of around 83% – 87% (vs. prior outlook of 80% – 88%) and chemical manufacturing plant utilization of between 79% – 83% (vs. earlier guidance of 78% – 86%).

The company expects Trading & Optimisation to be significantly higher than the fourth quarter of FY24 in Chemicals and Products segment.

The company also adjusted its LNG production forecast, now predicting between 6.4 million and 6.8 million metric tons from a previous guidance of 6.6 million – 7.2 million metric tons.

Last month, at Capital Markets Day 2025, Shell disclosed plans to increase shareholder distributions from 30%-40% to 40%-50% of cash flow from operations (CFFO) throughout economic cycles.

Shell has raised its structural cost reduction target from $2-3 billion by the end of 2025 to a cumulative $5-7 billion by 2028, based on 2022 levels.

Investors can gain exposure to the stock via Precidian ETFs Trust Shell plc ADRhedged SHEH and Abacus FCF Real Assets Leaders ETF ABLD.

Price Action: SHEL shares are trading lower by 4.80% at $61.05 premarket at the last check on Monday.

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