SHEL Shell Plc

--Shell will increase shareholder distributions starting from 2Q results announcement

--Distributions will move to 20%-30% of free cash flow from operations

--The company expects lower production from the integrated gas and upstream units in 2Q

By Jaime Llinares Taboada

Royal Dutch Shell PLC said Wednesday that it will increase total shareholder distributions to 20%-30% of cash flow from operations starting from the second-quarter results announcement on July 29.

The Anglo-Dutch energy company said that it will move to the next phase of its capital allocation framework as a result of strong operational and financial delivery, and an improved macroeconomic outlook.

The company said the level of additional distributions will be determined when there is full visibility on the second-quarter results.

Shell expects to have further reduced its net debt in the second quarter. It said it will retire its $65 billion net debt milestone and target further strengthening of its balance sheet and credit metrics.

In addition, Shell said its integrated gas production is expected to fall to 900,000 oil-equivalent barrels a day to 960,000 oil-equivalent barrels a day in the second quarter. LNG liquefaction volumes are expected to drop to 7.1 million metric tons-7.7 million metric tons, reflecting unplanned maintenance.

Upstream production is also expected to decline quarter-on-quarter, to 2.22 million oil-equivalent barrels a day-2.30 million oil-equivalent barrels a day.

However, oil-products marketing margins are expected to be higher than in the first quarter, with sales volumes of 4.0 million barrels a day-5.0 million barrels a day.

As for the chemicals business, margins are expected in line with the first quarter and sales volumes are seen at 3.5 million tons-3.8 million tons.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

July 07, 2021 02:51 ET (06:51 GMT)

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