Released September 22, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Shell Enterprises LLC, a U.S.-based subsidiary of Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands), announced earlier this week it had agreed to sell its business in the Permian Basin to ConocoPhillips (NYSE:COP) (Houston, Texas), already a leading developer in the area, for $9.5 billion in cash. Industrial Info is tracking more than $13.6 billion worth of Oil & Gas Production projects in the Permian Basin, as well as 19 plants in the area that are owned or co-owned by Shell, Chevron or their subsidiaries.
The transaction will transfer all of Shell's interest in the Permian to ConocoPhillips, subject to regulatory approvals. It is the latest move by ConocoPhillips in the Permian; in October, the oil and gas giant acquired Concho Resources, long a heavyweight in the Permian, for a total of $13.3 billion. The Concho acquisition added 550,000 net acres in the Permian to ConocoPhillips' holdings, including 200,000 barrels per day (BBL/d) of oil output and 719 million standard cubic feet per day of gas production.
The Shell acquisition adds 225,000 net acres to ConocoPhillips' Permian properties and is estimated to further boost ConocoPhillips' Permian production by about 40%. Jinjoo Lee, an analyst at The Wall Street Journal, noted that none of the purchased property is on federally held lands, which reduces the risk for regulatory complications. Lee also noted ConocoPhillips is emphasizing efficiency improvements at its existing wells, as opposed to just drilling new ones.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for a list of plants owned or co-owned by Shell, Chevron or their subsidiaries in the Permian Basin.
"We were presented with a unique opportunity to add premium assets at a value that meets our strict cost of supply framework and brings financial and operational metrics that are highly accretive to our multi-year plan," said Ryan Lance, the chief executive officer for ConocoPhillips, in a press release.
In a quarterly earnings-related conference call last month, Tim Leach, ConocoPhillps' executive vice president for the Lower 48, noted the company had invested about $1.5 billion in the contiguous U.S. in the first half of 2021, and that executives expected the investment rate "to stay steady throughout the remainder of the year."
"We're currently running 15 rigs in the Lower 48: 11 in the Permian and four in the Eagle Ford," Leach said in the conference call. "And we're running seven frac spreads: four in the Permian and three in the Eagle Ford. And we expect those levels of activity to remain pretty constant throughout the rest of the year. [It's] one of the big benefits of the size and scope that we have."
Industrial Info is tracking more than $6 billion worth of ConocoPhillps projects in various phases of development worldwide. Subscribers can click here for a full list.
As for Shell, the Dutch-based giant has been under pressure to unload its carbon assets since a court in its home country ruled in May that Shell must cut its global carbon emissions by 45% by 2030, from a 2019 baseline. Earlier in the year, after it had announced a loss of more than $21 billion for fiscal 2020, its worst in decades, Shell outlined ambitious plans to transition into a net-zero emissions energy business by 2050. For more information, see February 22, 2021, article - Shell Commits to Net-Zero Business by 2050.
Industrial Info is tracking more than $30 billion worth of Shell projects that are under construction worldwide. Subscribers can click here for a full list.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The transaction will transfer all of Shell's interest in the Permian to ConocoPhillips, subject to regulatory approvals. It is the latest move by ConocoPhillips in the Permian; in October, the oil and gas giant acquired Concho Resources, long a heavyweight in the Permian, for a total of $13.3 billion. The Concho acquisition added 550,000 net acres in the Permian to ConocoPhillips' holdings, including 200,000 barrels per day (BBL/d) of oil output and 719 million standard cubic feet per day of gas production.
The Shell acquisition adds 225,000 net acres to ConocoPhillips' Permian properties and is estimated to further boost ConocoPhillips' Permian production by about 40%. Jinjoo Lee, an analyst at The Wall Street Journal, noted that none of the purchased property is on federally held lands, which reduces the risk for regulatory complications. Lee also noted ConocoPhillips is emphasizing efficiency improvements at its existing wells, as opposed to just drilling new ones.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for a list of plants owned or co-owned by Shell, Chevron or their subsidiaries in the Permian Basin.
"We were presented with a unique opportunity to add premium assets at a value that meets our strict cost of supply framework and brings financial and operational metrics that are highly accretive to our multi-year plan," said Ryan Lance, the chief executive officer for ConocoPhillips, in a press release.
In a quarterly earnings-related conference call last month, Tim Leach, ConocoPhillps' executive vice president for the Lower 48, noted the company had invested about $1.5 billion in the contiguous U.S. in the first half of 2021, and that executives expected the investment rate "to stay steady throughout the remainder of the year."
"We're currently running 15 rigs in the Lower 48: 11 in the Permian and four in the Eagle Ford," Leach said in the conference call. "And we're running seven frac spreads: four in the Permian and three in the Eagle Ford. And we expect those levels of activity to remain pretty constant throughout the rest of the year. [It's] one of the big benefits of the size and scope that we have."
Industrial Info is tracking more than $6 billion worth of ConocoPhillps projects in various phases of development worldwide. Subscribers can click here for a full list.
As for Shell, the Dutch-based giant has been under pressure to unload its carbon assets since a court in its home country ruled in May that Shell must cut its global carbon emissions by 45% by 2030, from a 2019 baseline. Earlier in the year, after it had announced a loss of more than $21 billion for fiscal 2020, its worst in decades, Shell outlined ambitious plans to transition into a net-zero emissions energy business by 2050. For more information, see February 22, 2021, article - Shell Commits to Net-Zero Business by 2050.
Industrial Info is tracking more than $30 billion worth of Shell projects that are under construction worldwide. Subscribers can click here for a full list.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
