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Shell (RDS.A) Renews Q1 View, Foresees Lower Upstream Output

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Royal Dutch Shell (RDS.A - Free Report) recently provided an update on its first-quarter 2021 guidance. The Texas winter storm disrupted the company’s operations and is estimated to bear a negative impact of up to $200 million on its adjusted earnings.

Let’s now delve deep into some key segmental estimate revisions for the March quarter.

Upstream

The upstream production is projected between 2,400 and 2,475 thousand barrels of oil equivalent per day (boe/d) due to the Texas winter storm. However, the year-ago production was 2,710 thousand boe/d. Meanwhile, Shell had earlier predicted its first-quarter 2021 upstream volumes to be 2,400-2,600 thousand boe/d. Taking into account the improvement in currently realized liquid prices, Shell expects to recognize positive adjusted earnings from this segment. 

Oil Products

Shell estimates first-quarter oil product sales in the band of 3,700-4,700 thousand barrels per day. Although this indicates an 11% decrease from the year-earlier reported number, the upper end of the estimate is assumed to be met. This Netherlands-based company anticipates its refinery availability between 71% and 75%.

Chemicals

The company’s chemical sales volumes are predicted between 3,500 and 3,700 thousand tons with the plant utilization of 77-81% of the producing volumes. Further, Shell expects chemicals base and intermediate margins to improve from the sequential quarter’s levels.

Integrated Gas

The company expects first-quarter LNG liquefaction volumes to contract to 7.8-8.4 million tonnes from its previous year’s quarterly output of 8.88 million tonnes. Moreover, its segmental production is forecast in the 920-960 thousand boe/d range. In the year-earlier period, Shell produced 955 thousand boe/d.

About Shell

This integrated energy player belongs to a global group of energy and petrochemical companies. It is involved in all phases of the petroleum industry right from exploration to final processing and delivery. The company is scheduled to release first-quarter 2021 earnings results on Apr 29, 2021.

Zacks Rank & Other Key Picks

Shell currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the energy space include Matador Resources Company (MTDR - Free Report) , Diamondback Energy, Inc. (FANG - Free Report) and Denbury Inc. (DEN - Free Report) , each presently flaunting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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