(New throughout, adds statement from Shell, details and
background)
Sept 20 (Reuters) - Royal Dutch Shell said on
Monday it is selling its assets in the largest U.S. oil field to
ConocoPhillips for $9.5 billion in cash.
The deal would expand Conoco's footprint in the Permian
Basin, the heart of the U.S. shale industry. For Shell, it is a
further step away from its traditional focus on oil and gas
toward greater reliance on renewable energy production.
"The cash proceeds from this transaction will be used to
fund $7 billion in additional shareholder distributions after
closing, with the remainder used for further strengthening of
the balance sheet," Shell said in a statement.
Reuters first reported in June that Shell had put up for
sale its assets in the Permian, the shale formation stretching
across Texas and New Mexico that accounts for around 40% of U.S.
oil production.
Shell owns about 260,000 acres (105,200 hectares) in that
basin, mostly in Texas, Its operated and non-operated rigs
averaged 193,000 barrels of oil equivalent per day in 2020,
around 6% of its total output that year, according to its
website.
It is the second sizable transaction announced by
ConocoPhillips in the Permian inside a year: in January, it
closed the all-stock purchase of Concho Resources.
The Wall Street Journal reported the news earlier on Monday.
(Reporting by David French in New York and Arathy S Nair in
Bengaluru; Editing by Anil D'Silva)
