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Shell (RDS.A) May Exit Prolific Permian Operations for $10B

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Royal Dutch Shell plc (RDS.A - Free Report) is contemplating the divestment of a portion or all of its interests in Permian Basin – the most prolific shale play in the United States – according to people familiar with the matter, as reported by Reuters.

The company’s Permian assets, spanning across Texas and New Mexico, spread over 260,000 acres. The source added that the sale could fetch the integrated energy firm an amount as high as $10 billion. Thus, Shell is gradually shifting focus from fossil fuels. The proceeds, if the deal is confirmed, will probably be utilized by the company for reducing debt loads and for investing in clean energy, also per the source.

According to the people familiar with the process, the European energy giant will possibly divide its deal into several packages or could also accept shares as a mode of payments from buyers. This will probably increase interests from bidders. According to analysts, as reported by Reuters, the potential bidders for the Permian assets of Shell are Chevron Corporation (CVX - Free Report) , Devon Energy Corporation, EOG Resources (EOG - Free Report) and ConocoPhillips (COP - Free Report) along with few private equity houses.

Reuters added that none of the companies agreed to comment on the news.

Currently, Shell carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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