Surge in the price of oil and gas proves a boon for Shell with shares up early 90 per cent over the last 12 months
A surge in the price of oil and gas, while causing havoc for the UK’s energy market, has proved a boon for Shell, which has seen its shares climb nearly 90 per cent over the last 12 months.
The FTSE 100 oil giant is due to report its third-quarter results on Thursday, but has already flagged some of the key figures in a trading update earlier this month.
Among these was a £290m hit to profits caused by Hurricane Ida, which slammed into the Gulf of Mexico in late August and temporarily shut down swaths of the region’s oil and gas industry. The energy company said the hurricane hit oil and gas production.
However, the business’s cash flow has been boosted during the period by the soaring price of oil and gas, with Brent crude prices alone having jumped 13 per cent since late July to over $85 a barrel.
More cash means more dividends, and with the company already planning to return 20 per cent-30 per cent of its cash flow to shareholders there will be hopes the new funds will push payouts higher.
Analysts are already predicting Shell will pay out 61p per share this year – and that makes it the third-biggest payer in the FTSE 100.
Any news of a fresh share buyback will also be eyed, as the company is due to conclude its current £1.4billion repurchase scheme before next week’s results.
However, there could be competing pressure from environmental lobbies, who are pushing for the firm to divert more cash into renewables and shift itself towards green energy.