Big oil is earmarked to deliver another good quarter given the tight supply causing spike in commodity price $Micro WTI Crude Oil - main 2211(MCLmain)$$Natural Gas - main 2210(NGmain)$
Shell $SHELL PLC SPON ADS EACH REPR 2 ORD SHS(SHEL)$released early announcements few weeks back to manage market expectations that Q3 is not as good as Q2. However, it still beats expectations.
My key take aways are listed. Near term head wind is windfall tax from government. UK government may act soon. Interestingly, the current CEO Ben actually called out the government to tax the Oil companies more to help the poor. On the other hand, I look forward to Shell paying down the debts in this high interest rate era.
1) dividend is expected to hike by 15% from Q4 2022 (to be paid Mar 2023) - note that the usual practice is once gone up, big oil dont really cut down. I know Shell did that 2 years back (1st time ina century). So let's hope history will not repeat too frequent.
2) Buy back of 4b (6b for last quarter) is allocated for the next 90 days. Usually all shares bought back are cancelled, so ROE will go up. Share price will be supported nicely and again this is a sign that Management thinks the company is cheaply valued.
3) Debt went higher from Q2 (46.xb) to Q3 (48.3b). To give you a context, Shell had debt of 52.6 ended Q4 2021.
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