Shell on Wednesday flagged a mixed third-quarter outlook, with completion of its ARC Resources acquisition set to push integrated gas production sharply higher while low water levels on the Rhine crimp refining output.
The London-listed energy major said integrated gas production is now expected at 740,000 to 780,000 barrels of oil equivalent per day in the third quarter, up from 631,000 in the second quarter, with the outlook including volumes from ARC Resources following the deal's completion on 2 September.
Shell agreed in April to acquire the Montney-focused Canadian producer in a transaction valued at roughly $16.4bn enterprise value, adding about 370,000 barrels of oil equivalent per day of production and some 2bn barrels of proved and probable reserves, a deal the company has said will accelerate its production growth rate to roughly 4% through 2030.
Upstream production guidance for the third quarter stands at 1.735m to 1.835m barrels of oil equivalent per day, against 1.824m in the second quarter, with exploration well write-offs expected at roughly $0.3bn.
In chemicals and products, Shell said low Rhine water levels are weighing on utilisation at its Rheinland refinery, with refinery utilisation guided at 93% to 97% for the quarter, down from 102% in the second quarter.
Chemicals utilisation is expected at 81% to 85%, against 83% previously.
The indicative refining margin is guided at $42 a barrel for the quarter, up from $24 a barrel in the second quarter, while the indicative chemicals margin is seen falling to $208 a tonne from $270 a tonne.
Marketing sales volumes are expected at 2.55m to 2.65m barrels a day, with marketing adjusted earnings guided lower than the second quarter.
Renewables and Energy Solutions is guided to an adjusted loss of $0.6bn to $0.8bn for the quarter.
Shell said cash flow from operating activities excluding working capital is expected to include an outflow of roughly $2.5bn tied to the timing of payments for emissions certificates under Germany's Fuel Emissions Trading Act, historically settled in the fourth quarter.
The company also flagged that net debt will be affected by the cash consideration and debt assumed in the ARC Resources acquisition, alongside an increase in variable components of long-term shipping leases.
A company-compiled consensus managed by Vara Research is due on 21 October, ahead of Shell's full third-quarter results on 29 October.