Shell's Output Expansion Plan for Perdido Development Faces Delay

Shell plc SHEL, the British oil and gas giant, mentioned that the firm has been facing setbacks in raising production from the Perdido offshore development in the Gulf of America. The company had initially expected to bring three wells online in April 2025 to boost production. These three wells are part of Perdido's Great White unit, and one was brought online in March 2025.

Production Challenges and Delays

However, the other two wells are facing delays and are anticipated to come online by the end of this year. The three wells are expected to produce up to 22,000 barrels of oil equivalent per day (Boe/d) at peak rates, thereby increasing the platform's output.

The production from the Perdido development began in 2010. The offshore field is operated by Shell, which holds a 35% working interest. The remaining 65% interest is held by Chevron and other partners. At peak rates, the output capacity from the field is 125,000 Boe/d.

Upcoming Developments

The Perdido development includes three field, namely Great White, Tobago and Silvertip.  As part of its efforts to boost production at the platform, Shell had also mentioned that it planned to bring two additional wells into production at the Silvertip unit in December 2024. Together, these wells are anticipated to produce up to 6,000 Boe/d from the unit at peak rates, boosting production from the platform. The company expects first oil from these wells in 2026.

SHEL’s Zacks Rank and Key Picks

SHEL currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Diversified Energy Company plc DEC, Expand Energy Corporation EXE and RPC, Inc. RES, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Diversified Energy Company is an independent oil and natural gas producer in the United States. The company is primarily engaged in the production, transportation, and marketing of natural gas and natural gas liquids. The rising demand for natural gas as a cleaner-burning fuel and an uptick in the commodity’s prices are expected to positively impact the company’s bottom line.

Expand Energy is a leading U.S.-based natural gas producer formed through the merger of Chesapeake Energy Corporation and Southwestern Energy Company. Natural gas is expected to play an increasingly important role in the energy transition journey. Expand Energy is poised to benefit from the rising demand for natural gas as a cleaner-burning fuel. The recent rise in natural gas prices is also anticipated to positively impact EXE’s profitability.

RPC generates strong and stable revenues through a diverse range of oilfield services, including pressure pumping, coiled tubing and rental tools. RPC is strongly committed to returning value to shareholders through consistent dividend payments and share buybacks, making it an attractive choice for investors seeking steady returns.

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This article originally published on Zacks Investment Research (zacks.com).

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