Shell Sells Major Shale Assets

Sep 30, 2013, 1:50pm CDT
As Shell sells off even more major shale assets, what could be next?

Deon Daugherty
Senior reporter-
Houston Business Journal
Email  | Twitter  | Google+
Royal Dutch Shell Plc’s (NYSE: RDS) trio of recent shale asset sales raises the question of what could be next in the U.S. for the supermajor.
The company, which just announced it’s selling its stake of 106,000 acres in the Eagle Ford Shale in South Texas, told the Wall Street Journal the assets weren’t meeting the company’s profit targets.
It’s a similar point that’s been made in recent weeks as Shell has announced other plans to divest assets in Colorado and Kansas.
The Hague-based Shell’s U.S. subsidiary, Shell Oil Co., is headquartered in Houston.
Stephen Simko, an analyst with Morningstar Inc. in Chicago, noted that after overspending in the sector, Shell has planned to dial back its presence in the shales.
“Shell overall has been very unsuccessful with its major investments into North American shale,” he said.
The company has spent about $30 billion in U.S. and Canadian shale plays, and short of a major rebound in natural gas prices, some of its exploration and production returns will be hurting, according to a Morningstar research note in August.
“Production targets seem unlikely to be met given that North American shale gas is no longer economic to develop,” Morningstar said. “Shell made a big bet there, and for now, this appears to be a bust.”
As for any profit from the divestitures, Simko said Shell could net a few billion dollars from the sales in South Texas and Kansas.
Still, in other sectors, Shell is thriving. Last week, the company revealed its selection of a site on the Gulf Coast for a proposed multibillion-dollar project — a $12.5 billion investment, at minimum — for a natural gas-to-liquids facility.

Courteous, concise comments relevant to the topic are welcome, whether or not they agree with the views that predominate here. Long rants proclaiming the infallibility of your own views or favorite ideology will not be posted, neither will repeated attempts to hammer on a point already addressed, nor will comments containing profanity, abusive language, flame-baiting and name calling. Please indicate precisely what you are blogging about. I just got a post from ? E-Mail ? which said: "Is this going to be OUR furture??. I have no idea what they were referring to and no way to contact them. This is why we prefer comments that are signed by actual persons who leave their E-Mail address (it won't be published) so they can be contacted if questions arise.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: