Shell’s True Worth: A Net Asset Value Breakdown
Unpacking the intrinsic value of Shell’s upstream, LNG, and downstream assets to reveal what the market may be missing.
Introduction
Oil and gas companies can offer compelling upside for investors—especially when price margins are strong, global demand is rising, and geopolitical cycles favor energy producers. Shell, one of the world’s largest integrated energy giants, has entered a new strategic era. With a balanced portfolio spanning legacy oil and gas assets, a dominant LNG business, and growing bets on renewables, the question for investors isn’t just earnings—but intrinsic value.
In this article, I apply a Net Asset Value (NAV) framework to dissect Shell’s operations and explain why this oil titan deserves a place in your portfolio—particularly amid geopolitical instability, OPEC market dynamics, and softening energy prices. I believe Shell’s financial resilience and operational depth position it to deliver portfolio upside—even in a world defined by uncertainty. This analysis breaks down Shell’s operations using a Net Asset Value (NAV) framework to uncover what the market might be missing—and why Shell remains a compelling addition to energy-focused portfolios.
🚀 Serious about oil & gas investing?
📬 Join a fast-growing community of analysts and investors reading PetroSymposium for deep energy valuation insights every week.
NAV in the Context of Shell
While traditional DCF and multiple-based valuation methods dominate for integrated oil majors, NAV can unlock asset-specific insights, especially for Shell’s upstream and LNG assets. In this framework:
Upstream assets are valued on a field-by-field basis using reserve life, production profiles, and discounted future cash flows.
Integrated Gas (LNG) is modeled using DCF due to its contractual cash flows and longer project timelines.
Downstream and Marketing is treated with an EBITDA multiple approach.
Renewables and Emerging Power investments are high-risk, often loss-generating, and are either modeled at book value or excluded.
Portfolio Breakdown
Business Unit Breakdown (2024):
Integrated Gas: 954 thousand boe/d
Upstream: 1,831 thousand boe/d
Oil Sands (Part of Chemicals & Products): 51 thousand boe/d
Shell’s Business Segments Overview:
Upstream: ~1.8 million BOE/d from diversified geographies including the Gulf of Mexico, Nigeria, and the North Sea.
Integrated Gas: Leading LNG player with ~70 million tonnes per annum trading volume.
Downstream: Global refining and retail presence with over 46,000 service stations.
Renewables & Energy Solutions: Expanding solar, hydrogen, and EV charging network.
Estimated 2025 EBIT Contribution by Segment:
Upstream: 35%
LNG: 30%
Downstream: 25%
Renewables & Other: 10%
Key Valuation Assumptions
Commodity Price Deck (Base Case):
Brent Crude: $69.21/bbl
Global Gas Benchmark: $3.45/MMBtu
Discount Rates:
Upstream: 10%
LNG: 8%
Downstream: 7%
Renewables: 12% (if included)
Production Decline Rates:
Mature Fields: 7% annual decline
Growth Projects: Ramp-up over 2 years, flat for 3 years, then 5% decline
Other Assumptions:
Operating Costs: $15/BOE (upstream avg.)
CapEx: Field-by-field estimates based on historic cost ratios
Tax Rate: 35% global effective
Valuation Summary
Shares Outstanding (2025E): ~2.93 billion
NAV/Share: $74.74
Current Share Price (July 2025): $71.10
Implied Upside: ~5%
Sensitivity Analysis
NAV/Share Sensitivity to Brent Price:
Natural Gas Price Sensitivity:
Discount Rate Sensitivity (Upstream Segment):
Strategic Takeaways
Shell’s NAV valuation under current commodity prices suggests moderate upside potential versus market price.
LNG's value is sensitive to gas pricing, with upside if global gas markets tighten.
Upstream remains Shell’s largest NAV contributor, but is sensitive to lower oil prices.
Downstream and Renewables offer balance and strategic optionality.
Shareholder returns and asset monetization could further unlock value.
Conclusion & Investment View
At today’s commodity prices, our NAV model values Shell at approximately $74.74 per share, modestly above the current share price of $71.10, implying a 5% upside. Shell’s diversified portfolio offers resilient cash flows with balanced exposure to oil, gas, and energy transition opportunities. Investors should closely monitor commodity markets, as they remain the key driver of Shell’s intrinsic valuation.
💡 Want full access to NAV models, commodity sensitivity charts, and deep valuation breakdowns across the global energy sector?
🔒 Unlock premium reports and become a smarter energy investor—subscribe to PetroSymposium today.
References
Shell plc. (2024). Annual report and accounts 2024. https://www.shell.com/investors/results-and-reporting/annual-report/_jcr_content/root/main/section/promo/links/item0.stream/1742873115632/6c20b8111738b9a590ba145f0d1c4fa0e530dae0/shell-annual-report-2024.pdf
Shell plc. (2023). Annual report and accounts 2023. https://www.shell.com/investors/results-and-reporting/annual-report/2023.html
Yahoo Finance. (2025). Shell plc (SHEL) stock quote & summary data. https://finance.yahoo.com/quote/SHEL