Shell to sell gas fields in South Texas to OXY USA, Inc.
Shell today announced an agreement to sell a group of gas fields in South Texas to OXY USA, Inc., a subsidiary of Occidental Petroleum Corp., for approximately $1.8 billion, effective January 1, 2011. The sale is a further step in Shell's ongoing portfolio restructuring and focus on capital efficiency.
"We are concentrating our investment on the most promising growth opportunities and that means taking a hard look at existing assets like our fields in South Texas, where we have been active for more than 50 years," said Marvin Odum, Director Upstream Americas. "This sale helps move us towards our goal of divesting $7-8 billion in assets worldwide in 2010 and 2011, and rationalizing our North American portfolio following on from recent acquisitions there."
The fields include all Shell's gas-producing properties and related assets in South Texas, where Shell first drilled wells in 1953. They are predominately mature tight gas fields which currently produce some 200 million cubic feet of gas equivalent per day. Shell and OXY USA have signed a definitive sales agreement and the transaction is expected to close in early 2011, subject to regulatory approvals.
Acreage recently acquired in the Eagle Ford shale in Texas is not part of the transaction.
Shell continues to make significant investments in natural gas development in North America. Earlier this year, Shell added to its tight gas holdings, acquiring the Eagle Ford acreage and purchasing East Resources, a private company with significant acreage in the highly prospective Marcellus shale in the eastern USA.