ConocoPhillips to acquire Shell’s Permian business for $9.5 billion

ConocoPhillips has agreed to acquire the Permian business of Shell Enterprises LLC, a subsidiary of Royal Dutch Shell PLC, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals, Shell said in a release Sept. 20.

Shell’s Permian business includes ownership in about 225,000 net acres with current production of around 175,000 boe/d with producing properties entirely in Texas, as well as over 600 miles of operated crude, gas, and water pipelines and infrastructure.

Estimated 2022 production from the assets is expected to be 200,000 boe/d, roughly half of which is operated, ConocoPhillips said in a separate release.

In conjunction with the deal, ConocoPhillips said it plans to increase its targeted level of dispositions to $4-5 billion by 2023 from the previously announced $2-3 billion. The incremental $2 billion of planned dispositions are expected to be sourced primarily from the Permian basin as part of the company’s ongoing portfolio high-grading efforts, it said.

Shell said a majority of Midland-based Permian employees and many Houston-based employees will be offered employment by ConocoPhillips.

The effective date of the transaction is July 1, with closing expected in this year's fourth quarter.