Royal Dutch Shell is set to confirm underlying performance continued to improve in the second quarter of 2017 despite low oil prices when it reveals its first-half results on Thursday.
Europe's largest oil and gas firm is expected to show weaker quarter-on-quarter upstream earnings, because of the recent downturn in oil prices to below $50 a barrel and seasonally weaker production, but earnings should still be in positive territory for the fourth quarter in a row, said analysts at Panmure Gordon.
Reported earnings are forecast to reflect a hefty charge for identified items, which Panmure estimated at $1.3bn (£1bn), including a charge for the the Corrib disposal that was announced last week.
The Anglo-Dutch company is halfway through a three-year, $30bn divestment programme to cut debt following its acquisition of BG Group. So far, it has announced deals valued at more than $20bn, and analysts said proceeds from the company's disposals are set to ramp up in the second quarter.
The FTSE 100-listed oil major is expected to receive cash disposal proceeds of around $7.5bn.
"We forecast organic cash flow to comfortably cover cash dividend and capital expenditure, so the flood of cash from disposals should help drive a notable 2.6 per cent quarter-on-quarter reduction in gearing, taking gearing below 25 per cent for the first time since the acquisition of BG at the start of 2016," said Colin Smith, equity researcher at Panmure.