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Shell delivered solid results that were broadly in line with the consensus thanks to oil and gas trading. The 34% yoy decline in profitability showed the company’s resilience compared to its peers thanks to high gas optimization and robust cash conversion. A buyback program amounting to $3.5bn will take the H1 aggregate figure to above the CMD guidance of $5bn. The annual cash pay-out ratio will come in at the upper end of the guidance range of 30-40%.
Companies: Shell Plc
AlphaValue
Profits missed the consensus by 9% after quarters of beats over the past year. Shell also saw a 56% annual decline and a 47% quarterly profit slide – a trend that has taken the industry by surprise. Quarterly cash flows (+7% qoq and -19% yoy), however, were primarily helped by a $4.8bn inflow, thereby enabling Shell to continue its share buyback programme with another $3bn due in Q3 and raise the dividend by 15% promised while the capex range has been revised down.
Shell delivered the expected update on how to spend less and return more to shareholders. The 15% dividend increase and committed share buy-backs of at least $5bn in H2 lifted the FY23 yield to over 11%. Despite slashing the FY25 FCF expectation by $10bn compared to that at the 2019 CMD, Shell maintains an ambitious target to register 10% annual growth in FCF/share through 2025. Without big buy-backs and chunky divestments, this will be an onerous target to accomplish.
Shell delivered the best beat of the Big Oil earnings season with adjusted earnings of $9.6bn, 21% above the street consensus. The results were driven by solid oil and gas trading despite a 20% yoy decline in the Upstream business. Both the Integrated Gas and Products segments benefitted from trading optimization as the latter saw earnings spike by 85% yoy. Cash spending continues with the buyback pace being maintained at $4bn in the Q2 and the capex guidance having been confirmed.
In defiance of lower oil and gas prices, Shell booked higher quarterly profits in Q4 FY2022 at $9.8bn. While beating estimates by 21%, annual profits more than doubled to $39.9bn The quarterly earnings were largely driven by the strong gas business, which accounted for 60% of the overall profits. Since good results dictate good shareholder returns, Shell increased the quarterly dividend by 15% as announced and declared another share buy-back programme of $4bn to be executed by March 2023.
After a discouraging trading update in earlier October, Shell beat the estimates and posted the second highest quarterly results. The adjusted EBITDA was a strong beat by nearly 60%. The adjusted earnings were 18% down qoq due to lower profits from the trading activity. While the results were a good surprise, a better one came along with an additional $4bn share buy-back in Q4, raising the shareholder remuneration to 40% of the operating cash flow.
Significantly lower trading and optimization results for the Integrated Gas segment and sliding refining and chemical margins hit Shell’s Q3 earnings after a historically buoyant Q2 FY2022. This serves as a warning to the entire industry as refining and chemical margins weakened in Q3 across the board.
Strong results, above consensus, with an adj. EBITDA beating the Q1 record by more than 20%. The gains stem from the Upstream division (adj. EBITDA of $11.2bn, +24% qoq) on higher oil and gas realization prices and the Chemicals & Products division (adj. EBITDA of $3.2bn, +59% qoq) which benefited from record refining margins. A $6bn buyback has been announced for the quarter and the company confirmed that a shareholder distribution in excess of 30% of CFFO.
Imperial Helium (IHC CN)C; Under review: Merger with Royal Helium to build a material player with discovered resources and huge upside - Imperial Helium is merging with Royal Helium with Imperial Helium shareholders set to hold ~30% of the combined entity. The share exchange ratio suggests a 10% premium to the Imperial Helium share price on the day prior to the announcement. Shareholders will vote on the transaction in June with completion expected in the 2nd half of June. Management, insiders a
Companies: SYN ALV ALV FEC PEN BP/ SHEL TRIN RBD IOG ENOG NOG SDX MATD GTE PEN XOM STL EQNR 0R1M EGY
Auctus Advisors
The results are above consensus with an adjusted profit of $9.13bn (+43% qoq) and adjusted EBITDA of $19bn (+16% qoq), with gains in Upstream as well as in trading margins. Shell announces that shareholders’ distribution in H2 (div + buy-backs) is going to be above 30% of CFFO, a positive and above the guidance of 20-30% of CFFO. Currently, Shell is busy with its $8.5bn buy-back (announced in Q4 21) with $4.5bn remaining and to be executed this quarter.
AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; Target price of A$0.060 per share: Flow rate at the top end of expectations at important appraisal well - The Anshof-3 well flowed ~75 bbl/d of light oil (and no water) on test from the Eocene reservoir. This has positive implications for production, reserves and the upside case. The flow rate was at the upper end of expectations (40-80 bbl/d). The well has not been acidized yet which could boost production rate b
Companies: OMV ADX CE1 FAR DETNOR AKRBP TAL REP PEN SHEL EME EDR HUR DELT PAT DEC REP1 TETY CEG TTE PEN XOM ENI OMV1 SEPLAT SNM 0A1V VLE 0R1M EGY ENI
AUCTUS PUBLICATIONS ________________________________________ Looking at E&P Free Cash Flow - While companies still carry hedges contracted at lower prices, we estimate our producer universe will generate ~25% FCF yield (defined as FCF/EV) in 2022 at ~US$100/bbl. At just US$70/bbl, the overall FCF yield is estimated at 15% for 2023 and >20% for 2024. Assuming US$110/bbl, this increases further to ~40% for each of 2023 and 2024. At YE24, balance sheet net cash, after paying shareholder distributio
Companies: OMV ADX CE1 BLOK 0MDP ALV ALV AXL TAL REP PEN SHEL CASP PHAR SOU I3E ECHO SDX LBE VOG STAR REP1 TETY GPRK WEN CNE PEN TGL ENI OMV1 SNM 0A1V EGY ENI
AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; Target price of A$0.040 per share: Subsidy from the Australian government – ADX has received a A$1.15 mm subsidy to cover a proportion of fixed costs incurred between September 2020 and February 2021. This amount will boost ADX balance sheet and be allocated to the appraisal and development of the Anshof discovery as well as the Vienna Basin Hydrogen Production and Storage Project. This is a material cash injectio
Companies: 88E ADX 0MDP FEC DNORD TLW BP/ SHEL PHAR ENQ ENOG PMG SDX LBE DEC CHAR GPRK CEG DNORD ENI SENX ENI
AUCTUS PUBLICATIONS ________________________________________ Vaalco Energy (EGY LN/CN)C; Target price increased from £4.80 per share to £5.30 per share: Very large reserves increase – YE21 SEC proved reserves were 11.2 mmbbl, up 250% compared to YE20 (3.2 mmbbl). This large increase reflects (1) a 5 mmbbl addition associated with improved well performance, field-life extension related to cost savings from the replacement Floating, Storage and Offloading vessel, and the addition of proved undevel
Companies: OMV CE1 AOI FEC PXT SOU TAL BP/ EOG SHEL SQZ PGR I3E SAVE STAR CHAR KOS FNK TTE XOM ENI OMV1 SEPLAT 0GEA 0R1M EGY ENI
Research Tree provides access to ongoing research coverage, media content and regulatory news on Shell Plc. We currently have 1 research reports from 9 professional analysts.
Since November, the JOG share price has moderated from a high of 250p to current levels of 149.5p. This is despite JOG having now made significant progress towards FID on its c.70mmboe Buchan project, with FID upcoming later this year. In our view this share price move is unjustified, with current levels further enhancing the value on offer, and making an attractive opportunity for investors.
Companies: Jersey Oil & Gas PLC
Zeus Capital
i3 Energy has announced that it has refinanced its Trafigura straight-line amortising facility with a traditional RBL facility provided by a Canadian chartered bank. We believe that i3 Energy's shareholders stand to benefit considerably from the restructured balance sheet because it is significantly better adapted to the company's needs, in our opinion. We believe the new RBL facility will free funds for growth and provide better long-term balance sheet stability, while significantly reducing in
Companies: i3 Energy Plc
WHIreland
i3 has announced a refinancing of its C$75m Trafigura debt facility, increasing liquidity for the company to pursue further growth initiatives. i3 has also announced its end 2023 reserves update, showing significant replacement of production during the year.
Diversified Energy, Touchstone Exploration, Savannah Energy, Chariot, Plexus Holdings, Energean, Gulf Keystone Petroleum, PetroTal Corp, Ithaca Energy, Pantheon Resources, Serinus Energy, Angus Energy, Aker BP, Equinor, BlueNord ASA, Invictus Energy Source: FactSet, weekly change 18/03/24-22/03/24 Oil edged lower to settle below $81 a barrel after a stronger dollar curbed investor appetite for commodities, offsetting signs of a tighter global crude market. Refined product supplies are looking m
Companies: TXP POS SAVE DEC CHAR
Cavendish
Companies: Good Energy Group PLC
Canaccord Genuity
Results demonstrate Bretana cash flows that allow growth CAPEX and dividends. PetroTal has produced a solid set of 2023 results. These show the cash flow generating capability of the company’s Bretana field in Peru, which enables PetroTal to both expend growth CAPEX while also making material returns to shareholders.
Companies: PetroTal Corp.
Companies: FOG PEB KBT EMR TIME GETB JNEO
The company's business structure is evolving and diversifying into several compelling and complementary businesses. The opportunistic, potential sale of its producing shallow assets would represent a significant change and the company's openness to realise value from that sale speaks to the company's prioritisation of shareholder interests and shareholder value creation. The current year will be significant for many of the company's growth businesses as they establish their first significant com
Companies: Caspian Sunrise PLC
• YE23 2P reserves were estimated at 11.8 mmboe, including 0.7 mmboe for Canada and 4.6 mmboe non-core, leaving 6.5 mmboe for the company’s core Colombian assets. This compares with 2.1 mmbbl at YE23 plus 3.9 mmbbl for Carrizales Norte reported in September for a total of 6 mmbbl. Adding back 0.6 mmbbl (net) produced at Tapir in 2023 suggests that Arrow has added 1.1 mmbbl at its core Colombian assets since the latest reserve reports (September 2023 for Carrizales Norte and YE23 for the other a
Companies: Arrow Exploration Corp.
Central Asia Metals (CAML LN) reported full year earnings with net revenue of US$197m down 12% YoY (-1% against VSA estimate) owing to lower commodity prices and modestly lower output albeit comfortably within guidance. EBITDA of US$97m was down 27% YoY marginally below our estimate as the lower top line combined with inflationary pressure. However, group COGS ex-D&A increased 8% YoY, far lower than in-country inflation. A flagged increase in taxation in Kazakhstan meant that net income was US$3
Companies: Central Asia Metals Plc
VSA Capital
Companies: Diversified Energy Company PLC
Tennyson Securities
• FY23 production, YE23 net cash and YE23 reserves and resources had been reported previously. • The FY24 production guidance of 21.5-24.5 mbbl/d with US$205-235 mm opex and US$135-155 mm capex has been re-iterated. • Current production continues to be high, with average production for the first half of March of ~23,000 bbl/d, including ~7.9 mbbl/d for Jasmine, 7.2 mbbl/d for Nong Yao, 2.9 bbl/d for Manora and 4.9 mbbl/d for Wassana. Production at Wassana is particularly high. • Valeura will als
Companies: Valeura Energy Inc.
Companies: FOG TND BVXP ACC HDD
Companies: PMG DUKE CMCL BOOM
Companies: Pantheon Resources plc
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