Shell plans £3.1bn of buybacks as profits soar on higher oil prices

Shell PLC (LSE:SHEL, NYSE:SHEL) shares rose after stronger oil and gas prices and improved trading led to its highest profits since 2022, with $4.2 billion (£3.15bn) of share buybacks announced. The buybacks comprise a new $3 billion programme on top of $1.2 billion left unfinished after the previous programme was suspended during its agreement to acquire ARC Resources. Shell maintained its quarterly dividend at $0.3906 a share, up 9% from a year earlier. Income attributable to shareholders reached $10.8 billion in the second quarter, up from $5.7 billion in the previous three months and $3.6 billion a year earlier. Adjusted earnings more than doubled year on year to $9.8 billion from $4.3 billion. The improvement reflected higher realised energy prices, stronger liquefied natural gas trading and improved refining and chemicals margins, as guided in its recent update. Cash flow from operations rose 80% to $21.4 billion and free cash flow increased to $17.5 billion, allowing Shell to reduce net debt to $41.8 billion from $52.6 billion at the end of March. First-half adjusted earnings increased 70% to $16.8 billion. Shell said higher trading, energy prices and refining margins offset increased operating and depreciation costs. Production fell 8% to 2.5 million barrels of oil equivalent a day, partly because the Middle East conflict reduced volumes from Qatar. The shares gained 1.5% to 3,374.5p in early trading on Thursday. The stock was also supported by a renewed rise in oil prices overnight and on Thursday morning as tensions involving the US and Iran increased concerns about global supplies.