Shell boosts $5bn buyback on Q3 profit surge

Shell announced a new $5 billion share buyback programme to be executed over the next three months after reporting a sharp rise in third-quarter 2026 profit. Adjusted earnings for the quarter were $10.81 billion, its highest quarterly result since 2022 and almost double the level recorded a year earlier. The result exceeded the $10.33 billion average estimate from a company-provided analyst poll, underlining the strength of the quarter. The fresh repurchase plan comes after Shell completed $4.2 billion of buybacks that had been announced with its second-quarter results.

Alongside the increased buyback, Shell declared a third-quarter dividend of 39.06 cents per share, compared with 35.8 cents a year earlier. Total distributions to shareholders in the quarter reached $5.3 billion. The company highlighted its strong balance sheet, reporting post-ARC acquisition gearing of 16.6%.

Shell’s third-quarter performance was supported by stronger refining margins and higher liquefied natural gas (XNGUSD) prices and volumes. Adjusted EBITDA for the group reached $22.7 billion, up from $14.8 billion a year earlier, while cash flow from operations was $21.0 billion and free cash flow was $16.3 billion. Return on average capital employed stood at 14.4%.

Refining was a key contributor to the earnings surge. Adjusted earnings in the chemicals and products division rose to $3.86 billion from $550 million a year earlier, with the products business contributing $3.75 billion on the back of higher refining margins. Integrated gas earnings increased 42% to $3.04 billion, supported by higher realised LNG prices and volumes. Upstream earnings rose to $3.19 billion from $1.80 billion, reflecting improved market conditions across Shell’s core hydrocarbon activities.

Shell reaffirmed its cash capital expenditure outlook for 2026 at a range of $23 billion to $25 billion, including spending linked to the ARC Resources acquisition. The company reported post-ARC gearing of 16.6%, equivalent to 2.7% excluding leases, and described its spending approach as disciplined. Shell’s strong cash generation and reduced leverage underpinned the decision to increase shareholder distributions through the new buyback programme.

Shell completed its $14.0 billion acquisition of ARC Resources on September 2, adding about 370,000 barrels of oil equivalent per day of production. For the fourth quarter, the company guided for upstream production of 1.7 million to 1.9 million barrels per day and refinery utilisation of 92% to 100%. Nine-month production in integrated gas was reported lower year on year due to the impact of the Middle East conflict on Qatari volumes.