Shell sells Permian business to ConocoPhillips in $9.5 bn-all cash deal

11:26 AM, 21st September 2021
Shell Enterprises LLC, a subsidiary of Royal Dutch Shell Plc, has agreed to sell its Permian business to ConocoPhillips, a leading shale developer in the basin, for $9.5 billion in cash. Shown here is the Permian general seismicity. (Representative Image/File Photo)

THE HAGUE, NETHERLANDS: Shell Enterprises LLC, a subsidiary of Royal Dutch Shell Plc, said it has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The effective date of the transaction is 1 July, with closing expected in Q4 2021. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips.

The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to the shareholder distributions in the range of 20-30 percent of cash flow from operations.

"After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition," said Wael Sawan, upstream director. "This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions."

Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.

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