Unplanned maintenance and harsh weather were named the culprits in a first quarter earnings preview by Shell plc in reducing its natural gas production guidance. ExxonMobil, meanwhile, said an uptick in prices should boost the bottom line.
The integrated energy majors previewed their first quarter results in separate filings. ExxonMobil is the largest U.S.-based oil and gas producer. Shell is the top European major and the No. 1 LNG trader.
Shell’s integrated gas production, which includes global LNG liquefaction volumes, is forecast to average 910,000-950,000 boe/d in the first quarter.The London-based supermajor during 4Q2024 produced 905,000 boe/d within the integrated gas arm.
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Management in January had forecast first quarter integrated gas output would average 930,000-990,000 boe/d, reflecting the restart of the behemoth Pearl gas-to-liquids project in Qatar following a major turnaround.
However, maintenance in Australia and a weather-related impact from cyclones cut into the output.
First quarter LNG liquefaction volumes are now estimated to be 6.4-6.8 million tons (Mt). Shell had previously forecast LNG volumes would average 6.6-7.2 Mt.
Within Shell’s upstream arm, production is forecast to be 1.79-1.89 million boe/d. That’s down from the previous guidance of 1.75-1.95 million boe/d.
Overall, natural gas trading is expected to be flat from the fourth quarter, while oil trading is expected to be higher.
The Shell-led LNG Canada export facility in Kitimat, British Columbia, is nearing startup by this summer. It would deliver supply to Asian markets.The first phase could transport up to 14 Mt/y.
During Shell’s capital markets day in March, CEO Wael Sawan said the company is targeting an increase of up to 5% in LNG sales over the next five years.
The company’s short exposure to Henry Hub natural gas prices in the integrated gas business is “less than what it has been in the past,” Shell’s Cederic Cremers said last month. He took over the integrated gas arm on April 1.
NGI’s Daily Historical Data show Henry Hub prices averaged $4.166/MMBtu in 1Q2025, up more than $2 from the year-ago period.
Shell Offshore Inc. also has ramped up production at Dover, the second subsea tieback to the deepwater Appomattox hub in the Gulf of Mexico, aka Gulf of America. Estimated peak production from Dover, which is in Mississippi Canyon about 170 miles southeast of New Orleans, is 20,000 boe/d.
Higher Price Boost
Meanwhile, ExxonMobil is expecting to report positive impacts to its first quarter results from higher natural gas and oil prices. Increased refining margins also were forecast to boost profits, it stated in a filing.
ExxonMobil estimated that 1Q2025 profits would be around $900 million higher sequentially from the fourth quarter. The company reported net profits were flat year/year in 4Q2024 at $7.6 billion ($1.72/share).
Natural gas prices rose by 30% sequentially during the first quarter, lifted by cold U.S. weather. Brent crude oil prices averaged slightly under $75/bbl in the first quarter, which was around 1.3% higher than in the fourth quarter.
Permian Curtailment
Houston-based APA Corp., whose natural gas and oil operations are spread around the world, also issued a preliminary report ahead of earnings season. APA’s Lower 48 portfolio is concentrated in the Permian Basin, with natural gas prospects concentrated in the Delaware formation.
The independent said it curtailed 8 MMcf/d of U.S. gas output during the first quarter in response to weak Waha prices.
NGI’s Waha spot price landed below zero on 11 trading days in March, bottoming out at an average negative $1.120 on March 18.
APA also shut in about 500 b/d of U.S. natural gas liquids between January and March.
APA during 1Q2025 fetched $2.00/Mcf on average for its domestic natural gas. For international gas, the realized price averaged $4.15.
ExxonMobil and Shell each are scheduled to issue first quarter results on May 2. APA plans to report its results on May 8.
