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Shell (SHEL) Gets Nod to Restart Production at Prelude FLNG

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The British oil and gas giant, Shell Plc (SHEL - Free Report) , recently got regulatory clearances and approvals to restart production at its Prelude floating liquefied natural gas (FLNG) facility at Browse Basin in Australia. The go-ahead signal came after Australia's offshore petroleum supervisory body removed all restraints and cleared the route for restart after production was halted at the facility in December 2021 due to a fire incident and a power outage.

Subsequent to the outage, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) of Australia directed Shell to close down the facility until it could prove that production could begin safely without any health and safety hazards to personnel on board.

However, in its newest update, NOPSEMA closed the order given to Shell after it found that the company mitigated the risks in a suitable manner. Following the update, a SHEL spokesperson informed, "We continue to work methodically through the stages in the process to prepare for hydrocarbon restart with safety and stability foremost in mind."

In February, Shell’s CEO, Ben van Beurden, stated that it was improbable that the Prelude FLNG facility would be brought back online in the first quarter of 2022. Moreover, there is no clarity as to when the facility will restart.

The Prelude FLNG facility produces natural gas off the coast of Australia. It is located at Browse Basin, about 295 miles northwest of Broome in Western Australia. Shell has a 67.5% interest in the facility, while Japan’s Inpex holds a 17.5% stake. Additionally, Korea’s Kogas has 10% and Taiwan’s CPC holds a 5% stake in the unit. Prelude FLNG can produce up to 3.6 million tons per annum (mtpa) of LNG, 1.3 mtpa of condensate and 0.4 mtpa of LPG.

Headquartered in London, Shell is one of the primary oil supermajors, a group of U.S. and Europe-based big energy multinationals with operations spanning worldwide. The company is fully integrated as it participates in every aspect related to energy, from oil production to refining and marketing. SHEL operates as an energy and petrochemical company. Shell plc was formerly known as Royal Dutch Shell.

Shell currently carries a Zacks Rank #3 (Hold). Investors interested in the energy space might look at the following companies, which carry a higher Zacks Rank. Oasis Petroleum , Devon Energy (DVN - Free Report) and Vista Oil & Gas (VIST - Free Report) each sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oasis Petroleum stock has increased by about 176.9% in a year. Oasis Petroleum beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, the average being around 37.6%.

The Zacks Consensus Estimate for OAS’ 2022 earnings is projected at $29.04 per share, up about 205% from the projected year-ago earnings of $9.52.

Devon Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 18.5%. Devon Energy is valued at around $41.5 billion.

The Zacks Consensus Estimate for DVN’s 2022 earnings is projected at $6.66 per share, up about 88.7% from the projected year-ago earnings of $3.53. Devon Energy stock has rallied 205.4% in a year.

The Zacks Consensus Estimate for Vista’s 2022 earnings is pegged at $1.55 per share, up 187% from the projected year-ago earnings of 54 cents.

Vista stock has gone up 253.3% in a year. The Zacks Consensus Estimate for VIST’s 2022 earnings has been revised 11.5% upward over the past 60 days.

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