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Shell (NYSE:SHEL) expects Q2 earnings from gas trading will come in “significantly lower” than in Q1, the world’s biggest trader of liquefied natural gas said Friday.
In a corporate update ahead of Q2 results later this month, Shell (SHEL) said earnings from the unit are “expected to be significantly lower compared to a strong first quarter due to seasonality and fewer optimization opportunities.”
The weaker trading results are not a surprise after exceptional results in recent quarters, RBC analyst Biraj Borkhataria said: “Overall, we see the statement as neutral given most operational indicators are looking in line with market expectations.”
Shell (SHEL) also said it expects to book $3B in writedowns for the quarter, primarily due to a 1% increase in the discount rate used for impairment testing.
The company said Q2 oil and gas production will fall to 1.65M-1.75M boe/day from 1.87M boe/day in Q1 due to scheduled field maintenance, and the indicative refining margin is forecast to drop to $9/bbl from $15/bbl in Q1.
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