Back to top

Shell (RDS.A) to Offload Woodside Stake for $2.7 Billion

Read MoreHide Full Article

Moving ahead with its divestment goals, European oil giant Royal Dutch Shell plc (RDS.A - Free Report) is set to vend its entire holding in Australian LNG operator Woodside Petroleum Limited . Shell entered into an underwriting agreement with two investment banks to sell 111.8 million shares (representing 13.28% of Woodside’s issued capital) for $2.7 billion. The deal is expected to close by Nov 16.

The Anglo-Dutch giant has been divesting stakes in Woodside for quite some time now. In November 2010, the company sold 10% of the issued capital of Woodside, reducing its holding in the company to 24.27%. In 2014, it sold 78.27 million shares, bringing down its interest in Woodside to over 13%. With the current deal, Shell is set to make an exit from Woodside. However, Shell still remains one of the partners of the joint venture in two LNG projects in Western Australia. It holds 16.7% and 27% interest, respectively in the North West Shelf and Browse Basin projects in the continent. 

The move will help Shell proceed with its $30-billion divestment program, which is aimed at lowering debt arising from the $47-billion acquisition of BG Group. The latest divestment is expected to enhance Shell’s cash flows and return value to shareholders. With Shell already closing more than $25 billion divestment deals, it remains on track to meet its target by 2018. The move is also in line with the company's aim to upgrade and streamline its portfolio.Shell seeks to simplify the operational structure by offloading assets. 

Headquartered in Netherlands, Shell is one of the largest integrated energy companies engaged in production, refining, distribution and marketing of oil and natural gas. The company currently carries a Zacks Rank #3 (Hold). Shares of Shell have rallied 17.5% year to date compared with 4.4% growth of its industry.


Some better-ranked players in the same industry are ExxonMobil Corporation (XOM - Free Report) and Braskem S.A. (BAK - Free Report) . Both these companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ExxonMobil delivered an average positive earnings surprise of 8.81% in the trailing four quarters.

Braskem S.A. delivered an average positive earnings surprise of 47.02% in the trailing four quarters.

Today's Stocks from Zacks' Hottest Strategies

 It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Royal Dutch Shell PLC (RDS.A) - free report >>

Exxon Mobil Corporation (XOM) - free report >>

Braskem S.A. (BAK) - free report >>

More from Zacks Analyst Blog

You May Like