Shell has downgraded its oil production sales forecast and said on Friday it expects impairment charges between $1.7 and $2.3 billion for the fourth quarter.
The company has also downgraded its oil production sales forecast, estimating it to be between 6.5 million boepd (barrels of oil equivalent per day) and 7 million boepd for the fourth quarter. Shell’s previous estimates were 6.65 million bpd to 7.05 million bpd.
On top of that, the company expects additional well write-offs of between $100 million and $200 million, while Shell’s capital expenditure for 2019 could be between $24 billion and $29 billion.
Why It Matters
Shell’s profit dropped 15% to $4.8 billion in the third quarter of 2019 due to lower oil and gas prices, but still exceeded its forecasts due to strong trading.
But the company, at the time warned that higher taxes would hit earnings by about $500 million to $600 million in the fourth quarter.
The company warned in October that the U.S-China trade tensions could hit demand and affect its performance.
Shares of Shell fell 0.45% to close at $29.37 on Thursday.