Shell had earlier this month said its oil output peaked in 2019 as it undertakes its largest overhaul yet to expand renewables and low-carbon businesses under growing investor pressure to battle climate change.
The Anglo-Dutch company has been selling assets in Canada, exiting the oil sands business back in 2017, as the country battled years-long transportation bottlenecks and companies shifted their focus to higher-value assets elsewhere.
“Divesting these assets underpins Shell’s effort to focus the upstream portfolio to deliver cash,” said Wael Sawan, Shell’s upstream director, adding that the sale allows it to focus on core production assets like the prolific Permian Basin in Texas and New Mexico.
For Crescent, the assets add production of about 30,000 barrels of oil equivalent per day in what it considers a ‘low-risk’ play with key infrastructure and market access already in place, its chief executive officer, Craig Bryksa, said in a statement.
Crescent expects the deal to boost its cash generation and add to its all per share financial metrics this year. Its New York-listed shares rose almost 20% after the bell.
The Canadian company will pay C$700 million in cash and 50 million of its shares to acquire the Shell assets.
Separately, Ovintiv Inc also announced the sale of its Duvernay assets on Wednesday to an unnamed buyer.
Formerly known as Encana and once Canada’s largest company, Ovintiv last year moved its base of operations to the United States.
Source: Reuters.com