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NorthAmOil INVESTMENT NorthAmOil
ConocoPhillips acquires
Shell’s Permian assets
US ROYAL Dutch Shell has agreed to sell its port-
folio of shale assets in the US’ Permian Basin to
ConocoPhillips for $9.5bn in cash.
Shell’s assets cover around 225,000 net acres
(910.5 square km) and produce about 175,000
barrels of oil equivalent per day (boepd). The
Anglo-Dutch super-major said on September
20 that after having reviewed “multiple strat-
egies and portfolio options” for the assets, the
ConocoPhillips deal had emerged as the most
compelling value proposition. the largest US shale-focused acquisition that
“This decision once again reflects our focus year, significantly expanded ConocoPhillips’
on value over volumes as well as disciplined holdings in the Permian. Concho held drilling
stewardship of capital,” Shell Enterprises’ rights across roughly 800,000 gross acres (3,237
upstream director, Wael Sawan, said. square km) in the Permian.
Shell intends to use the proceeds from the sale ConocoPhillips CEO Ryan Lance said at
to fund $7bn worth of additional shareholder the time that the deal delivered “unmatched
distributions after closing. The super-major, not- scale and quality across” value drivers within its
ing that its Permian business had recorded a pre- business.
tax operating loss of $491mn in 2020, added that The sale of Shell’s Permian assets, mean-
the remainder of the proceeds would be used to while, reflect the company’s continued focus
strengthen its balance sheet. on both boosting shareholder value while also
Shell said it expected to close the transaction, transforming the super-majopr into a “provider
which has an effective date of July 1 and is still of net-zero emissions energy products and ser-
subject to regulatory approvals, in the fourth vices”. The super-major has set a goal of net-zero
quarter of this year. emissions by 2050.
The deal is the latest in a line of such consol- Shell said in February that it intended to
idations across the shale industry and is similar maintain underlying operating expenses in the
in size to ConocoPhillips’ $9.7bn acquisition of near term of no more than $35bn, pursue annual
Concho Resources in January. That deal, which divestments averaging $4bn and maintain a
was announced in October 2020 and represented “progressive” dividend policy.
PERFORMANCE
Shell aims to wrap up US
Gulf repairs this year
US ROYAL Dutch Shell has said it expects to resume station for all production from Shell’s assets in
production from some of its assets in the Mars the Mars corridor in the Mississippi Canyon
corridor of the US Gulf of Mexico this year. area of the Gulf to onshore oil and gas terminals.
The super-major said on September 20 that a WD-143 A handles production from the Mars
damage assessment of Hurricane Ida’s impact on and Ursa platforms, while WD-143 C handles
the West Delta-143 (WD-143) oil and gas trans- production from Olympus.
fer facilities had revealed “significant” structural Given WD-143’s repairs timeline, Shell
damage. expects Olympus to resume production in the
Shell said: “We estimate that our WD-143 ‘A’ fourth quarter, with Mars and Ursa to follow in
platform facilities will be offline for repairs until the first quarter of next year.
the end of 2021, and that the facilities on our Shell operates the WD-143 platform with
WD-143 ‘C’ platform will be operational in the a 71.5% stake, while BP owns the remaining
fourth quarter of 2021.” 28.5%. The two companies have a similar own-
The WD-143 facilities serve as the transfer ership split of the Mars and Olympus platforms,
P10 www. NEWSBASE .com Week 38 23•September•2021
