Shell says shale assets on offer are overpriced

Shell "would have appetite for expanding" its shale portfolio through acquisitions but is yet to find attractive assets at a good price, chief financial officer Jessica Uhl said today.

"Most of the things we see tend to look overpriced, and we have tried to maintain cool heads," she said. "Our outlook for 2025 that we have articulated is an organic story", with the growth expectations for the shale business based on the portfolio that Shell already has, she said.

Shell plans to invest $3bn-4bn/yr on shale in 2021-25, including $2.5bn/yr of "sustaining" capital expenditure (capex). "But of course, if there are opportunities — we are very pleased with the delivery capability we have established with that part of our business — so we would have appetite for expanding, but it would have to sit within the financial framework," Uhl said.

Shell said it does not need to make a large acquisition on shale or other assets to meet its commitment to grow shareholder distributions.

The firm's strategy briefing today included the potential to distribute $125bn to shareholders in dividends and share buy-backs in 2021-25, which is half of Shell's current market capitalisation. "We can do all of that without major inorganic [investment]," chief executive Ben van Beurden said.

"But at the same time, if we do see opportunities, yes, of course, we will take a look at that," he said. "Would that be potentially in shales? Yes, if there is a great opportunity that will fit our strategy, absolutely. Could it be another part of the portfolio? Absolutely yes. Could be even in power. But only again if it makes sense," van Beurden said.