Shell completes sale of Perm business to ConocoPhillips
HOUSTON (December 1, 2021) – Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has completed the sale of its Permian stake in ConocoPhillips for $ 9.5 billion in cash. The agreement includes the sale of Shell's 225,000 hectares net and the existing production of around 175 thousand barrel equivalent per day.
As noted in the announcement of the agreement to sell Shell's Permian business, this transaction reflects Shell's focus on value rather than volume and disciplined capital management. This transaction was made possible by the excellent operational performance of the Permian team and offers great value to our shareholders through expedited cash deliveries and additional distributions.
As previously announced, the cash proceeds from this transaction will be used to fund additional shareholder distributions of $ 7 billion, with the remainder being used to further strengthen the balance sheet. The first tranche of additional shareholder distributions will be in the form of share buybacks of up to $ 1.5 billion and will begin on December 2, 2021. The form and timing of the distribution of the remaining $ 5.5 billion will be announced in early 2022. These distributions are in addition to our shareholder distributions in the range of 20-30% of cash flow from operating activities.
On September 20, 2021, Shell and ConocoPhillips announced that they had entered into an agreement to acquire Shell's Permian business by ConocoPhillips.
The transaction resulted in after-tax income of $ 2.4 billion to $ 2.6 billion after adjustments.
The majority of the employees of Permian, based in Midland, and many employees, based in Houston, have been offered employment by ConocoPhillips effective upon completion under the terms of the Transaction.
Shell is a leading US energy company with interests in 50 states and more than 15,000 employees. Shell's US portfolio of operated companies and holdings includes oil, natural gas, petrochemicals, gasoline, lubricants and other refined products, as well as renewable energies like wind, solar and mobility options like electric vehicle charging and hydrogen. In the United States, Shell is also investing in an integrated energy company that will provide electricity to millions of homes and businesses.
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