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Shell (RDS.A) Divests Canadian Oil Sands Assets for $7.25B
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Anglo Dutch oil giant Royal Dutch Shell PLC recently announced its intention to offload majority of its Canadian oil sands acreage in a deal of net worth $7.25 billion. Per the deal, the company would divest all its oil sands interests, apart from the 10% stake in the Athabasca mining project, to Calgary- based upstream player Canadian Natural Resources Limited (CNQ - Free Report) .
This asset divesture will fetch Shell $8.5 billion from Canadian Natural Resources. The consideration will comprise of $5.4 billion cash and $3.1 billion shares. Shell has also entered into a second agreement with Canadian Natural Resources, wherein both the companies will jointly acquire Marathon Oil Canada Corporation, a subsidiary of Marathon Oil Corporation (MRO - Free Report) . The deal is valued at $2.5 billion or $1.25 billion for each in cash. Therefore the combined effect of the two deals will reduce Shell’s net proceeds to $7.25 billion.
The transactions are scheduled for closure in mid-2017, subject to regulatory approvals.
The deal takes the $30 billion divestment program of Shell another step forward as the company has achieved two thirds of its divestment target with this latest contract. The company had sold assets worth $5 billion last year and $14.7 billion this year that includes the Canadian assets share program.
The deal provides the company a major uplift in its drive to decrease the debt following the acquisition of BG Group for $47 billion. The exit from the Canadian oil sands assets is expected to enhance Shell’s cash flow and returns on capital. The move is also in sync with the company's aim to upgrade and streamline its portfolio.
The agreement also reflects the company’s aim to support the drive of reducing global carbon emissions as it came out of one of the most greenhouse gas-intensive sources of crude oil.
The Marathon acquisition will enable Shell to retain refining and other downstream assets related to Athabasca project, which is a joint venture between Shell, Chevron Corporation (CVX - Free Report) and Marathon’s Canadian affiliate.
Headquartered in Netherlands, Shell is one of the largest integrated energy companies and is engaged in production, refining, distribution and marketing of oil and natural gas.
The company outperformed the Zacks categorized Oil & Gas-International Integrated industry over the prior six months. During the aforesaid period, shares of Shell rallied almost 4% while the broader industry gained around 1%.
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Shell (RDS.A) Divests Canadian Oil Sands Assets for $7.25B
Anglo Dutch oil giant Royal Dutch Shell PLC recently announced its intention to offload majority of its Canadian oil sands acreage in a deal of net worth $7.25 billion. Per the deal, the company would divest all its oil sands interests, apart from the 10% stake in the Athabasca mining project, to Calgary- based upstream player Canadian Natural Resources Limited (CNQ - Free Report) .
This asset divesture will fetch Shell $8.5 billion from Canadian Natural Resources. The consideration will comprise of $5.4 billion cash and $3.1 billion shares. Shell has also entered into a second agreement with Canadian Natural Resources, wherein both the companies will jointly acquire Marathon Oil Canada Corporation, a subsidiary of Marathon Oil Corporation (MRO - Free Report) . The deal is valued at $2.5 billion or $1.25 billion for each in cash. Therefore the combined effect of the two deals will reduce Shell’s net proceeds to $7.25 billion.
The transactions are scheduled for closure in mid-2017, subject to regulatory approvals.
The deal takes the $30 billion divestment program of Shell another step forward as the company has achieved two thirds of its divestment target with this latest contract. The company had sold assets worth $5 billion last year and $14.7 billion this year that includes the Canadian assets share program.
The deal provides the company a major uplift in its drive to decrease the debt following the acquisition of BG Group for $47 billion. The exit from the Canadian oil sands assets is expected to enhance Shell’s cash flow and returns on capital. The move is also in sync with the company's aim to upgrade and streamline its portfolio.
The agreement also reflects the company’s aim to support the drive of reducing global carbon emissions as it came out of one of the most greenhouse gas-intensive sources of crude oil.
The Marathon acquisition will enable Shell to retain refining and other downstream assets related to Athabasca project, which is a joint venture between Shell, Chevron Corporation (CVX - Free Report) and Marathon’s Canadian affiliate.
Headquartered in Netherlands, Shell is one of the largest integrated energy companies and is engaged in production, refining, distribution and marketing of oil and natural gas.
The company outperformed the Zacks categorized Oil & Gas-International Integrated industry over the prior six months. During the aforesaid period, shares of Shell rallied almost 4% while the broader industry gained around 1%.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course. Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>