By Dominic Chopping

Shell lowered its integrated gas production estimate for the first quarter as volumes were hit by unplanned maintenance.

The London-based energy giant said Monday that maintenance in Australia, among other regions, means that gas production in the quarter should be between 910,000 and 950,000 barrels of oil equivalent a day, from a previous estimate of 930,000 to 990,000 barrels.

The updated guidance range would still mark an increase from the 905,000 barrels it produced in the fourth quarter of 2024.

Shell also trimmed its expectations for first-quarter liquefied natural gas liquefaction volumes to between 6.4 million and 6.8 million metric tons, also reflecting the unplanned maintenance in Australia and a weather-related impact from cyclones. Liquefaction refers to the conversion of gas into liquid, and Shell had previously guided for volumes of between 6.6 million and 7.2 million metric tons.

Upstream production--the extraction of crude oil and natural gas--is expected to be 1.79 million to 1.89 million oil-equivalent barrels a day, which is a narrower range from its previous guidance of 1.75 million to 1.95 million oil-equivalent barrel a day.

Last month, Shell set out its updated strategy, formalizing its pivot back to oil and gas assets. It plans to grow hydrocarbon production, increase shareholder returns over the next five years and cut more costs. British peer BP also earlier this year jettisoned its low-carbon strategy and cut spending on energy-transition assets in favor of core oil-and-gas production amid pressure from investors.

Shell expects first-quarter oil trading to be significantly higher than the fourth quarter, while gas trading should be in line with the preceding quarter despite a higher impact from expiring hedge contracts.

Shell had highlighted prior gas hedges would be a $200 million-$300 million headwind, but gas trading results now appear to have absorbed this, RBC Capital Markets analysts said.

"With continued strong gas trading and a seasonal uptick in oil trading, we see this as a resilient release from Shell," they said in a note to clients.

"Given some soft commentary around integrated gas trading at recent results, we think the update may provide some relief around potential downgrades to estimates for 2025, and points to continued delivery at Shell."

However, Shell flagged a higher-than-previously-expected tax charge in its upstream business during the first quarter, and this could see some modest downgrades to consensus earnings estimates, they added.

The company expects to report a first-quarter corporate adjusted loss of between $400 million and $600 million.

Shell will report results on May 2.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 07, 2025 03:18 ET (07:18 GMT)

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