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Shell (RDS.A) Sells Stake in Canadian Natural for $3.3B

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Royal Dutch Shell plc is set to offload its entire stake in Canadian Natural Resources Ltd. (CNQ - Free Report) , in order to withdraw its focus from the oil sand business in Canada. The agreement follows a similar move by the European oil giant when it jettisoned the majority of its Canadian oil sands acreage to Canadian Natural in a deal worth $8.5 billion in 2017. The asset divestiture fetched Shell a cash consideration of $5.4 billion and Canadian Natural's shares worth more than $3 billion.

Per the latest development, Shell will sell off the entire stake it had acquired from its divestment deal last year. The company will offload around 98 million shares in the Canadian Natural company for total proceeds of around $3.3 billion.

Reportedly, the shares are being offered at $34.10 each, representing more than 2.8% discount to Canadian Natural’s closing share price of $35.11 as of May 7. The transaction is scheduled for closure tomorrow.

The deal takes the $30 billion divestment program of Shell another step forward as the company nears its target. The divestment deals have provided the company a major uplift in its drive to decrease debt following the acquisition of BG Group for $47 billion. The deal will also help the company upgrade and streamline its upstream portfolio. The sale of stake in Canadian Natural is expected to enhance Shell’s cash flow and return on capital.

With Shell already wrapping up divestment deals worth $26 billion and having announced further asset disposals of more than $3 billion, the company remains focused to meet its target by 2018.

Headquartered in the Netherlands, Shell is one of the largest integrated energy companies engaged in the production, refining, distribution, and marketing of oil and natural gas. The company has a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space include Delek US Holdings, Inc. (DK - Free Report) and BP plc. (BP - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Delek’s 2018 earnings are anticipated to witness year-over-year growth of 151.6%.

BP surpassed earnings estimates in three out of the trailing four quarters, delivering an average positive earnings surprise of 29.58%.

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