Shell agrees to sell Permian basin assets to ConocoPhillips for $ 9.5 billion

The latest information on the oil and gas industry

Royal Dutch Shell has agreed to sell its operations in the Permian Basin, the largest oil field in the United States, to rival ConocoPhillips for $ 9.5 billion in cash.

The Dutch oil supermajor pointed out the Permian period as one of them. core Oil and gas production areas as recent as this year. However, accelerating the shift from fossil fuels is under intense pressure.

May, Dutch District Court Ordered The company will reduce pure carbon pollution by 45% by 2030 compared to 2019 levels, and CEO Ben van Baden said Shell hastened plans to reduce emissions. ..

shell Said The transaction on Monday will include approximately 225,000 acres of land producing approximately 175,000 barrels of oil per day. Houston-based ConocoPhillips said it expects to produce about 200,000 barrels per day from real estate by next year.

“After considering multiple strategies and portfolio options for Permian assets, the deal with ConocoPhillips has emerged as a very compelling value proposition,” said Wael Sawan, upstream director of Shell.

Shell said it would use $ 7 billion in cash from the transaction to fund “additional shareholder distribution after closing” and use the rest to repay debt. Analysts at RBC Capital Markets predicted that the sale would fund additional share buybacks. Shell’s share price rose more than 1.5% in after-hours trading on Monday.

The deal is between European-based oil companies such as Shell, BP and Total, who are trying to pivot towards renewables and low-carbon electricity, and US peers who continue to bet on the future of oil and gas. It highlights the widening of the gap between them.

ConocoPhillips will use the sale to deepen its push into the Permian basin, where hydrocarbon-rich shale exists between western Texas and southeastern New Mexico. In October 2020, the company spent $ 13.3 billion, including debt to purchase rival shale producers. Concho resource In the same area.

ConocoPhillips CEO Ryan Lance called it a “unique opportunity” to add to the company’s Permian business, which lags behind Cher’s rivals until Concho was acquired.

The US shale oil and gas industry, which has been plagued by serious economic losses for many years, Rapid integration This has spurred tens of billions of dollars in transactions over the past year and a half.

Shell said oil and gas production will continue to play an “important role” in its strategy of providing “the energy the world needs today, while funding shareholder distribution and energy conversion.”

The sale of shells was expected for several months, and many major shale producers were considering buying assets. Some bankers said the company could have a hard time finding a buyer because it doesn’t operate about half of Shell’s wells. That is, other companies, especially Occidental Petroleum, make operational decisions.

Shell agrees to sell Permian basin assets to ConocoPhillips for $ 9.5 billion

Source link Shell agrees to sell Permian basin assets to ConocoPhillips for $ 9.5 billion

Back to top button