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DATE
Thursday, Oct. 29, 2026
CALL PARTICIPANTS
- Chief Executive Officer – Wael Sawan
- Chief Financial Officer – Sinead Gorman
TAKEAWAYS
- Adjusted Earnings — $10.8 billion, reflecting higher refining margins and LNG prices compared to the second quarter of 2026.
- Cash Flow From Operations — $21.0 billion, driven by operational performance and $3.4 billion in net cash inflows from derivatives.
- Shareholder Distributions — $5.3 billion, comprising $3.2 billion in share buybacks and $2.2 billion in cash dividends.
- New Share Buyback Program — $5.0 billion, scheduled for completion by the fourth quarter results announcement.
- Dividend Per Share — $0.3906, representing a 9% increase over the previous 12 months.
- Net Debt — $39.7 billion, decreasing from $41.8 billion at the end of the second quarter of 2026.
- Gearing — 16.6%, a reduction from 18.7% in the previous quarter due to lower net debt and favorable equity movements.
- Cash Capital Expenditure Guidance — $23 billion to $25 billion for the full year 2026, including approximately $4 billion for the acquisition of ARC Resources.
- ARC Resources Acquisition — $14.0 billion equity value, adding approximately 370,000 barrels of oil equivalent per day to the production base.
- LNG Canada Phase 2 — 6 million tonnes per annum, representing Shell’s additional liquefaction capacity share following the final investment decision.
- Upstream Production — 1,802,000 barrels of oil equivalent per day, benefiting from record production in the Gulf of America.
- Integrated Gas Production — 772,000 barrels of oil equivalent per day, increasing 22% quarter over quarter due to the ARC Resources acquisition.
- Refinery Utilization — 96%, impacted by low water levels on the Rhine river affecting the Rheinland refinery.
- Chemicals Manufacturing Utilization — 84%, supported by lower maintenance activities compared to previous periods.
- Marketing Sales Volumes — 2,581,000 barrels per day, driven by seasonally higher demand in the mobility sector.
- Asset Divestments — $3.5 billion in proceeds for the first nine months, including the sales of Jiffy Lube and interests in the Na Kika platform.
- Tri Star Energy Acquisition — 320 company-owned sites, more than doubling the retail convenience presence in the United States.
- Sprng Energy Sale — $1.8 billion, representing the divestment of the low-carbon platform in India.
- Adjusted EBITDA — $22.7 billion, increasing from $20.7 billion in the second quarter of 2026.
- Tax Payments — $3.2 billion, reflecting the timing of payments and the macro price environment.
- Free Cash Flow — $16.3 billion, generated through strong operational results and optimized working capital.
- Operating Expenses — $9.0 billion, remaining relatively stable compared to $9.3 billion in the third quarter of 2025.
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RISKS
- Gorman stated, “cost on anything which is spot is definitely going up and beginning to push down on margins, whether it’s on the refining side, the chemical side or even on the oil side as well,” citing the impact of rising freight rates.
- Sawan noted that the second train at the Pearl GTL facility was impacted by regional instability and its restart remains subject to the opening of the Strait of Hormuz.
- Management reported impairment charges of $1.9 billion in the Marketing segment, primarily related to European biogas assets.
- Gorman warned that low Rhine river water levels reduced the utilization rate of the Rheinland refinery during the third quarter.
SUMMARY
Shell plc (SHEL +0.77%) reported a quarter focused on portfolio high-grading and capital allocation discipline while maintaining its 40% to 50% distribution policy through the commodity cycle. Management stated that the company completed the acquisition of ARC Resources and took a final investment decision on LNG Canada Phase 2 to strengthen its Integrated Gas position for the next decade. The company reported a reduction in net debt to below $40 billion and initiated a new $5 billion share buyback program. Sawan indicated that the organization is reallocating capital from noncore assets, such as end-of-life Gulf of America fields and Jiffy Lube, into businesses where it expects to generate higher risk-adjusted returns.
- Sawan noted that structural stability in higher oil prices is supported by rapid inventory drawdowns and government requirements for energy security.
- Management indicated that the company is not a natural owner of chemical assets and is progressing in deep discussions to monetize or reorganize those assets for value.
- Refining performance reached a 99% utilization rate year-to-date through the integration of trading personnel directly within manufacturing assets and the use of artificial intelligence for predictive maintenance.
- The company is exploring gas opportunities in Venezuela and Libya, looking to leverage existing infrastructure in Trinidad and the Atlantic LNG facility for value-accretive growth.
- Management stated that LNG Canada Phase 2 utilizes existing facilities as an add-on rather than requiring a new plant construction, leading to lower capital intensity.
- Sawan stated that while the company is not capital-constrained, it will maintain discipline to avoid the historical trend of surplus cash leading to inefficient investment.
INDUSTRY GLOSSARY
- boe/d: Barrels of oil equivalent per day, a unit of energy used to combine oil and natural gas production into a single measure.
- CFFO: Cash flow from operating activities, representing the cash generated by a company’s core business operations.
- FID: Final investment decision, the point at which a company’s board approves the capital expenditure for a major project.
- Gearing: A measure of financial leverage, calculated as net debt divided by total capital.
- GTL: Gas-to-liquids, a process that converts natural gas into high-quality liquid products like fuels and lubricants.
- mtpa: Million tonnes per annum, a standard measure of capacity for liquefied natural gas facilities.
Full Conference Call Transcript
Sinead Gorman: Welcome to Shell’s Third Quarter 2026 Financial Results Announcement. Shell’s CFO, Sinead Gorman, will present the results, then host a Q&A session alongside Shell’s CEO, Wael Sawan.
Wael Sawan: Welcome, and thank you for joining Shell’s third quarter results presentation for 2026. This quarter, we once again demonstrated our ability to deliver strong results in a highly volatile and elevated commodity price environment. Our diverse portfolio, performance focus and trading capabilities allowed us to capture further opportunities while we continue to work hard supplying our customers. All of this helped us deliver some $10.8 billion of adjusted earnings and $21 billion of cash flow from oper
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