Oil giant Royal Dutch Shell (NYSE:RDS.A) has announced a deal to sell the entirety of its West Texas Permian Basin assets to ConocoPhillips (NYSE:COP).
ConocoPhillips is purchasing the business from Shell for $9.5 billion U.S. in cash, the companies said in a news release.
The assets span 225,000 net acres with current production of about 175,000 barrels of oil per day, the statement said. The sale is set to close in the fourth quarter of this year.
The Permian Basin, which straddles West Texas and New Mexico, is the world’s busiest shale patch and accounts for nearly half the current activity in U.S. oil fields.
ConocoPhillips already boosted its footprint in the Permian Basin earlier this year when it took over independent producer Concho Resources in a $13-billion U.S. deal.
The deal would mark Shell’s complete withdrawal from onshore production in Texas. Shell said it plans to maintain its offshore production in Texas and the Gulf of Mexico.
The move comes as the oil industry faces increasing pressure to invest in renewable energy and lower its carbon emissions in the face of climate change.
