Shell Boosts Dividend By 15% & Discloses $5B Share Buyback Ahead Of Investor Day

Shell PLC SHEL released a business and financial update ahead of today's investor day.

The company has planned to keep its oil production stable to 2030 and aims to enhance its Integrated Gas business to maintain its position as the world's largest liquefied natural gas company.

Related: Shell To Quit Its Goal Of Lowering Oil Output: Report

Shell will also strategically review its Energy and Chemicals Park assets on Bukom and Jurong Island in Singapore and further high-grading its European assets.

Related: Shell Decides To Quit European Home Retail Energy Businesses Citing Lower Returns: Report

Capital Allocation: The company increased shareholder distributions (dividend & share buyback) to 30%-40% of CFFO through the cycle, vs. 20%-30% earlier. 

The company announced a 15% increase in dividend per share effective Q2 2023 (payable in September) and a share repurchase of at least $5 billion for H2 2023.

Capital Spending & Other Costs: Shell reduced capital spending to $22 billion-$25 billion per year for 2024 and 2025 (vs. $23 billion - $27 billion for 2023).

The company aims to cut annual operating costs structurally by $2 billion-$3 billion by the end of 2025.

Net-Zero Emissions Target: Shell targets to become a net-zero emissions energy business by 2050 and has planned investment of $10 billion-$15 billion in 2023-2025 to aid the development of low-carbon energy solutions.

Related: Shell Faces Criticism On Climate Change Initiatives: Report

"We are investing to provide the secure energy customers need today and for a long time to come, while transforming Shell to win in a low-carbon future. Performance, discipline, and simplification will be our guiding principles as we allocate capital to enhance shareholder distributions, while enabling the energy transition," said Shell Chief Executive Officer, Wael Sawan.

Price Action: SHEL shares are trading higher by 1.08% at $59.02 premarket on the last check Wednesday.