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Shell extends $3.5 bln share buybacks

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Strong LNG sales offset drop in refining

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Debt drops to lowest since 2015

(Updates shares in paragraph 3, Exxon and Chevron ( CVX ) reporting on

Friday in paragraph 8)

By Ron Bousso

LONDON, Oct 31 (Reuters) - Shell reported on

Thursday third-quarter profits of $6 billion that exceeded

forecasts by 12% as higher liquefied natural gas (LNG) sales

offset a sharp drop in oil refining and trading results.

The results, together with a drop in debt and strong

cash flow, could lift investor confidence in CEO Wael Sawan's

efforts to boost the company's performance by the end of 2025 as

he focuses on the most profitable businesses, primarily in oil,

gas and biofuels.

Shell shares were up 3.2% at 1541 GMT.

Global refining margins have dropped sharply in recent

months in the face of weaker economic activity and the start-up

of several new refineries in Asia and Africa, while oil prices

fell 17% in the quarter.

Shell, which operates five refineries, saw a near 70% annual

drop in profits for its refining and chemicals division. But

that was offset by a 13% rise in profits from its LNG division,

the British company's largest business.

"The consistency in performance is impressive," Barclays

analysts said in a note.

French rival TotalEnergies reported on Thursday

third quarter profits at a three-year low of $4.1 billion, hit

by collapsing refining margins and upstream outages, missing

market forecasts. And BP on Tuesday reported a 30% drop

in profits to $2.3 billion, the lowest in almost four years.

Top U.S. producer Exxon Mobil ( XOM ) and Chevron ( CVX )

report results on Friday.

RESILIENCE

Shell's adjusted earnings of $6.03 billion, its definition

of net profit, far exceeded analysts' expectations of a $5.36

billion profit but were down 3% from a year earlier.

The company said it would buy back a further $3.5 billion of

its shares over the next three months, at a similar rate to the

previous quarter. Its dividend was unchanged at 34 cents per

share.

"We've delivered another strong set of results, showing

resilience through the cycle and continuing to make significant

progress in strengthening our balance sheet," Chief Financial

Officer Sinead Gorman told reporters.

Shell, the world's biggest LNG trader, reported sales of the

super-chilled fuel of 17 million metric tons versus 16 million a

year earlier.

Earnings for the oil and gas production division rose 9%

from a year earlier, with production increasing 3% as new fields

came on stream.

In another positive sign, Shell's net debt dropped to its

lowest since 2015 at $35 billion, while its debt-to-market

capitalization ratio declined to 15.7% from 17.3% a year

earlier.

Cashflow from operations rose to $14.7 billion in the

quarter from $13.5 billion in the previous three months due to a

$2.7 billion capital build. Shell said it expected capital

spending to be below its guided range of $22-$24 billion for

2024.

The company aims to cut costs by $2-3 billion between 2023

and the end of 2025. In recent months it scaled back renewables

and hydrogen operations, retreated from European and Chinese

power markets and sold refineries. It also cut its oil and gas

exploration workforce by 20%, sources told Reuters in August.