TIDMRDSA TIDMRDSB
HOUSTON (September 20, 2021) - Shell Enterprises LLC, a
subsidiary of Royal Dutch Shell plc, 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
transaction will transfer all of Shell's interest in the Permian to
ConocoPhillips, subject to regulatory approvals.
"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.
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 our shareholder
distributions in the range of 20-30% of cash flow from operations.
The effective date of the transaction is July 1, 2021 with closing
expected in Q4 2021.
Shell has been providing energy to U.S. customers for more than
100 years and plans to remain an energy leader in the country for
decades to come.
Notes to Editors
-- Shell's Permian business includes ownership in approximately 225k net
acres with current production of around 175 thousand barrels equivalent
per day.
-- This transaction constitutes a Class 2 transaction for RDS plc under the
UK Listing Rules. The gross assets that are subject of this transaction
amounted to $10.5 billion December 31, 2020. The Permian business
recorded a before-tax operating loss of $491 million for the year ended
December 31, 2020. The transaction is expected to result in an after-tax
gain of $2.4 to $2.6 billion, subject to adjustments.
-- A further update to Shell's oil production outlook and portfolio will be
provided with fourth quarter earnings.
-- Majority of Midland-based Permian employees and many Houston-based
employees will be offered employment by ConocoPhillips with effect upon
closing in accordance with the terms and conditions of the transaction.
-- Since 2017, Shell's Permian operations have reduced green house gas and
methane intensity by 80% through investment in infrastructure and
technology.
-- Morgan Stanley & Co. LLC and Tudor, Pickering, Holt & Co. are serving as
Shell's financial advisors and Norton Rose Fulbright is serving as
Shell's legal advisor for the divestment.
-- Shell is one of America's leading energy companies with interests in 50
states employing more than 15,000 people. Shell's U.S. portfolio of
operated companies and interests consists of oil, natural gas,
petrochemicals, gasoline, lubricants, and other refined products along
with renewables such as wind, solar, and mobility options like electric
vehicle charging and hydrogen. In the U.S. Shell is also investing in an
integrated power business that will provide electricity to millions of
homes and businesses.
ENDS
Enquiries
Media International: +44 207 934 5550
Media Americas: +1 832 337 4355
Cautionary note
The companies in which Royal Dutch Shell plc directly and
indirectly owns investments are separate legal entities. In this
announcement, "Shell", "Shell Group" and "Group" are sometimes used
for convenience where references are made to Royal Dutch Shell plc
and its subsidiaries in general. Likewise, the words "we", "us" and
"our" are also used to refer to Royal Dutch Shell plc and its
subsidiaries in general or to those who work for them. These terms
are also used where no useful purpose is served by identifying the
particular entity or entities. "Subsidiaries", "Shell subsidiaries"
and "Shell companies" as used in this announcement refer to
entities over which Royal Dutch Shell plc either directly or
indirectly has control. Entities and unincorporated arrangements
over which Shell has joint control are generally referred to as
"joint ventures" and "joint operations", respectively. Entities
over which Shell has significant influence but neither control nor
joint control are referred to as "associates". The term "Shell
interest" is used for convenience to indicate the direct and/or
indirect ownership interest held by Shell in an entity or
unincorporated joint arrangement, after exclusion of all
third-party interest.
This announcement contains forward-looking statements (within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995) concerning the financial condition, results of operations and
businesses of Shell. All statements other than statements of
historical fact are, or may be deemed to be, forward-looking
statements. Forward-looking statements are statements of future
expectations that are based on management's current expectations
and assumptions and involve known and unknown risks and
uncertainties that could cause actual results, performance or
events to differ materially from those expressed or implied in
these statements. Forward-looking statements include, among other
things, statements concerning the potential exposure of Shell to
market risks and statements expressing management's expectations,
beliefs, estimates, forecasts, projections and assumptions. These
forward-looking statements are identified by their use of terms and
phrases such as "aim", "ambition", "anticipate", "believe",
"could", "estimate", "expect", "goals", "intend", "may",
"milestones", "objectives", "outlook", "plan", "probably",
"project", "risks", "schedule", "seek", "should", "target", "will"
and similar terms and phrases. There are a number of factors that
could affect the future operations of Shell and could cause those
results to differ materially from those expressed in the
forward-looking statements included in this announcement, including
(without limitation): (a) price fluctuations in crude oil and
natural gas; (b) changes in demand for Shell's products; (c)
currency fluctuations; (d) drilling and production results; (e)
reserves estimates; (f) loss of market share and industry
competition; (g) environmental and physical risks; (h) risks
associated with the identification of suitable potential
acquisition properties and targets, and successful negotiation and
completion of such transactions; (i) the risk of doing business in
developing countries and countries subject to international
sanctions; (j) legislative, fiscal and regulatory developments
including regulatory measures addressing climate change; (k)
economic and financial market conditions in various countries and
regions; (l) political risks, including the risks of expropriation
and renegotiation of the terms of contracts with governmental
entities, delays or advancements in the approval of projects and
delays in the reimbursement for shared costs; (m) risks associated
with the impact of pandemics, such as the COVID-19 (coronavirus)
outbreak; and (n) changes in trading conditions. No assurance is
provided that future dividend payments will match or exceed
previous dividend payments. All forward-looking statements
contained in this announcement are expressly qualified in their
entirety by the cautionary statements contained or referred to in
this section. Readers should not place undue reliance on
forward-looking statements. Additional risk factors that may affect
future results are contained in Royal Dutch Shell plc's Form 20-F
for the year ended December 31, 2020 (available at
www.shell.com/investor and www.sec.gov). These risk factors also
expressly qualify all forward-looking statements contained in this
announcement and should be considered by the reader. Each
forward-looking statement speaks only as of the date of this
announcement, September 20, 2021. Neither Royal Dutch Shell plc nor
any of its subsidiaries undertake any obligation to publicly update
or revise any forward-looking statement as a result of new
information, future events or other information. In light of these
risks, results could differ materially from those stated, implied
or inferred from the forward-looking statements contained in this
announcement.
The content of websites referred to in this announcement do not
form part of this announcement.
We may have used certain terms, such as resources, in this
announcement that the United States Securities and Exchange
Commission (SEC) strictly prohibits us from including in our
filings with the SEC. Investors are urged to consider closely the
disclosure in our Form 20-F, File No 1-32575, available on the SEC
website
https://www.globenewswire.com/Tracker?data=RGSnnfaPCkSWdb7Q_absJap6PG7OALMWFd4qFOfO-njMJGKW7z9GCXLR27mqIS3cQuxCD_8W_68HcFBAECgnnA==
www.sec.gov.
LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70
Classification: Inside Information
This announcement contains inside information.
September 20, 2021
Contacts:
- Linda M. Coulter, Company Secretary
- Media: International +44 (0) 207 934 5550; USA +1 832 337
4355
(END) Dow Jones Newswires
September 20, 2021 16:35 ET (20:35 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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