US, WASHINGTON (ORDO NEWS) — Royal Dutch Shell, an oil and gas company headquartered in the Netherlands, has announced the sale of shale gas production in the United States for $ 541 million.
The shale assets of the British-Dutch Shell in Appalachia will be bought by the National Fuel energy company from the United States, according to a Shell press release .
The deal is scheduled to be completed before the end of July: most of it will be cash, but National Fuel has the ability to pay for the purchase of up to $ 150 million in its shares.
The deal includes the transfer of 450,000 acres of rental space across Pennsylvania with 350 producing wells at Marcellus and Utica sites in Tioga County and with associated Shell infrastructure facilities.
The current net production in these areas is 250 million standard cubic feet per day. The transaction will become part of the sale of non-core assets in accordance with Shell’s strategy, which aims to develop more marginal, readily available oil assets.
“The abandonment of our position in the Appalachians is consistent with our desire to focus our portfolio,” said Wael Sawan, director of production at Shell. The company increases the share of cash on the balance sheet in difficult conditions, but does not completely abandon shale projects.
“This is the main part of our portfolio along with the enterprises of the deep-sea and conventional oil and gas industry,” said Shroud.
In April 2020, Royal Dutch Shell announced a reduction in dividends for the first time since World War II after a collapse in oil prices caused by the coronavirus pandemic.
The company in the I quarter reduced its net profit by almost half. Shell said it would pay quarterly dividends of 16 cents per share, compared to 47 cents that it paid each quarter in 2019.
The company has not cut dividends since the 1940s. Shell’s adjusted profit margin for changes in manufacturing costs (CCS) in Q1 was $ 2.756 billion, compared with $ 5.293 billion for the same period in 2019.
The company plans to reduce oil and gas production in the II quarter to 1.75-2.25 million barrels of oil equivalent per day from 2.7 million in the I quarter.
The International Energy Agency (IEA) expects energy demand to fall by 6% this year amid the coronavirus pandemic. In absolute terms, this is the largest decline in the entire history of observations.
Shell announced in March 2020 plans to cut spending by $ 5 billion to below $ 20 billion in 2020. The company also suspended its $ 25 billion share buyback plan amid falling energy prices.
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