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Shell sells Permian assets to ConocoPhillip for $9.5m

Shell sells Permian assets to ConocoPhillip for $9.5m

Mubasher: Shell Enterprises, a subsidiary of Royal Dutch Shell, has entered into an agreement to sell its Permian business to ConocoPhillips, a shales developer, in exchange for $9.5 billion.

The proceeds from the transaction will be used in providing $7 billion to additional shareholder distributions after closing and supporting Shell's energy transition, according to a recent press release.

Subject to regulatory approvals, the transaction is expected to be closed during the fourth quarter (Q4) of 2021.

Shell’s Permian business includes ownership in around 225,000 net acres with current production of about 175,000 barrels equivalent per day.

The Upstream Director, Wael Sawan, said: "After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition."

Sawan added: "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."

It is noteworthy to mention that Royal Dutch Shell plans to produce low-carbon jet fuel at scale by 2025 to contribute to cutting carbon emissions, Reuters reported.