Shell to sell interest in the US Gulf of Mexico Caesar-Tonga asset for $965 million
Apr 11, 2019
Shell Offshore Inc. (Shell), a subsidiary of Royal Dutch Shell plc, signed an agreement yesterday to sell its 22.45% non-operated interest in the Caesar-Tonga asset in the US Gulf of Mexico to Delek CT Investment LLC, a subsidiary of Delek Group Ltd (Delek). The total consideration for this deal is $965 million in cash.
The Sales and Purchase Agreement is subject to certain conditions, including regulatory approvals. The transaction is likely to close by the end of the third quarter 2019, with an effective date of January 1, 2019.
“This transaction represents our continued focus on strategically positioning our deep-water business for growth and is consistent with our Upstream strategy of pursuing competitive projects that deliver value in the 2020s and beyond.” said Andy Brown, Upstream Director, Royal Dutch Shell. “The sale will contribute to Shell’s ongoing divestment programme and allow us to direct resources to the areas where we see the most value in the longer term.”
Shell’s global deep-water production is expected to exceed 900,000 barrels of oil equivalent per day (boe/d) by 2020 from already discovered and established reservoirs. The portfolio includes growth opportunities in our US Gulf of Mexico, Brazil, Nigeria and Malaysia heartlands, as well as in emerging offshore basins such as Mexico, Mauritania and the Western Black Sea.
Notes to Editor:
- Caesar-Tonga is located approximately 190 miles (300 kilometers) south-southwest from New Orleans, Louisiana in the Green Canyon area of the US Gulf of Mexico. The development area covers blocks GC683, GC726, GC727 and GC770 at water depths of about 4,900 feet (1,500 meters).
- The field is operated by Anadarko Petroleum Corporation, holder of the 33.75% interest. The remaining interest is distributed between Equinor (23.55%), Shell (22.45%) and Chevron (20.25%). The asset is tied back to Anadarko’s Constitution SPAR through subsea equipment.
- Current total average production at Caesar-Tonga is over 70,000 boe/d total gross.
- Delek will enter into a long-term purchase and sales agreement with Shell Trading (US) Company for the oil produced.
International: +44 207 934 5550
US & Brazil: +1 832 337 4355
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this release refer to companies over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations” respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in a venture, partnership or company, after exclusion of all third-party interest.
This release contains forward-looking statements concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. There can be no assurance that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2018 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward looking statements contained in this release and should be considered by the reader. Each forward-looking statement speaks only as of the date of this release, April 11, 2019. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this release.
We may have used certain terms, such as resources, in this release that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov