Shell sells UK North Sea asset and Gabon onshore interests

11/1/2017

THE HAGUE -- Shell has completed the sale of a package of UK North Sea assets to Chrysaor for a total of up to $3.8 billion, including an initial consideration of $3.0 billion and a payment of up to $600 million between 2018-2021 subject to commodity price, with potential further payments of up to $180 million for future discoveries. This sale was announced on January 31, 2017 and has an effective date of July 1 2016. Completion follows receipt of all necessary regulatory and partner approvals.

The package of assets consists of Shell’s interests in Buzzard, Beryl, Bressay, Elgin-Franklin, J-Area, the Greater Armada cluster, Everest, Lomond and Erskine, plus a 10% stake in Schiehallion. Shell retains a significant, more focused and strengthened presence in the UK North Sea, to which it remains committed.

Shell transferred 253 staff to Chrysaor upon completion of the transaction. In the fourth quarter of 2017, Shell will record an accounting gain on sale of $1.0 billion against the values of both the Shell and former BG assets included in the package. Completion of this deal shows the clear momentum behind Shell’s $30 billion divestment program and is in line with Shell’s drive to simplify the upstream portfolio and re-shape the company into a world class investment.

Company also sells Gabon onshore interests

Royal Dutch Shell through its affiliates, has completed the sale of its entire Gabon onshore oil and gas interests to Assala Energy Holdings a portfolio company of The Carlyle Group, for a total of $628 million including amount equivalent to interest. This sale was announced on March 24, 2017 with an economic date of December 31, 2015.

With this transaction, Assala Energy will assume debt of $285 million. The transaction will result in a total post-tax impairment for Shell of $151 million. Of this impairment, $53 million was taken in the first quarter of 2017, $98 million will be taken in the third quarter of 2017 with a final reconciliation to be reflected in the fourth quarter of 2017. Assala Energy will make additional payments up to a maximum of $150 million depending on production performance and commodity prices.

This transaction consists of all of Shell’s onshore oil and gas operations and related infrastructure in Gabon: five operated fields (Rabi, Toucan/Robin, Gamba/Ivinga, Koula/Damier, and Bende/M’Bassou /Totou), participation interest in four non-operated fields (Atora, Avocette, Coucal, and Tsiengui West), as well as the associated infrastructure of the onshore pipeline system from Rabi to Gamba and the Gamba Southern export terminal. Shell onshore in Gabon produced approximately 41,000 boepd in 2016. Shell Trading will continue to have lifting rights from the Gabon onshore assets for the coming five years.

Effective today, Assala Energy will operate Shell’s onshore Gabon assets upstream assets. At completion, some 430 local employees have transferred from Shell to Assala Energy.

The completion of this deal shows the clear momentum behind Shell’s $30 billion divestment program and is in line with Shell’s drive to simplify the upstream portfolio and re-shape the company into a world class investment.

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