J.P. Morgan Keeps Buy Rating on Shell plc with $30 PT

J.P. Morgan maintains a Buy rating on Shell plc (SHEL) with a price target of £30. Shell reported Q2 2025 earnings of $4.3 billion and a robust CFFO of $11.9 billion, with a 2025 cash capex outlook of $20 - $22 billion. The company produces oil and natural gas and operates in various segments, including Integrated Gas, Upstream, and Renewables and Energy Solutions.

Shell plc (SHEL) has made significant strides in enhancing its gas production capabilities with the recent unveiling of a cutting-edge subsea compressor system developed by OneSubsea. The system, installed at Shell's Ormen Lange field in the Norwegian Sea, is expected to unlock substantial additional gas reserves for export to Europe [1].

OneSubsea, a joint venture backed by Schlumberger (SLB), Aker Solutions, and Subsea7, has highlighted that its subsea compressor solution is designed to boost recovery from the Ormen Lange field. The Ormen Lange field is the second-largest gas field off the coast of Norway and is a key player in Europe's energy supply [1].

The subsea compressor system, described as the largest in the world, is capable of operating with unprocessed multiphase well streams, including condensates, produced water, and mono ethylene glycol (MEG), with liquid fractions ranging from 0% to 100%. This innovative capability sets it apart from conventional compressors, which require perfectly dry gas [1].

Mads Hjelmeland, CEO of OneSubsea, commented on the milestone, stating, "This milestone represents a significant achievement not only for OneSubsea but also for our customers and the wider energy industry. The Ormen Lange Phase 3 project truly demonstrates what we can achieve together when bold vision meets cutting-edge innovation and execution capabilities" [1].

The system is part of Shell's Ormen Lange Phase III project, which began production at the end of June 2025. The project aims to increase recovery from the field by up to 85%, equivalent to the gas supplies needed to heat up to 5 million homes next year alone [1].

The subsea compressor system will use onshore variable speed drives (VSDs) located 120 kilometers away, eliminating the need for subsea VSDs or topside alternatives. This configuration is expected to improve project economics [1].

Shell's Ormen Lange Phase III project sets a record for the deepest installation of a subsea compression system ever, at water depths of over 900 meters below sea level. The gas will be delivered to the Nyhamna gas plant 120 kilometers away, setting another record as the longest subsea step-out ever [1].

Shell is the operator (17.8%) of the field, with Vår Energi (6.3%), Petoro (36.5%), Equinor Energy (25.3%), and Orlen Upstream Norway (14%) as partners [1].

OneSubsea has recently won multiple assignments, including a contract with Equinor for an all-electric subsea production system (SPS) destined for a field in Norwegian waters [1].

Shell's robust financial performance in Q2 2025, with earnings of $4.3 billion and a cash flow from operations (CFFO) of $11.9 billion, underscores the company's financial strength and commitment to innovation in the energy sector [2].

References:
[1] https://www.offshore-energy.biz/onesubseas-cutting-edge-tool-enables-shells-field-to-step-up-on-the-gas/
[2] J.P. Morgan maintains a Buy rating on Shell plc (SHEL) with a price target of £30. Shell reported Q2 2025 earnings of $4.3 billion and a robust CFFO of $11.9 billion, with a 2025 cash capex outlook of $20 - $22 billion.