Shell agrees $9.5 billion Texas shale assets sale to ConocoPhillips By Reuters

(Reuters) -Royal Dutch Shell (LON:) said on Monday it is selling its assets in the largest U.S. oil field to ConocoPhillips (NYSE:) for $9.5 billion in cash.

The deal would expand Conoco’s footprint in the Permian Basin, the heart of the U.S. shale industry. For Shell, it is a further step away from its traditional focus on oil and gas toward greater reliance on renewable energy production.

“The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet,” Shell said in a statement.

Reuters first reported in June that Shell had put up for sale its assets in the Permian, the shale formation stretching across Texas and New Mexico that accounts for around 40% of U.S. oil production.

Shell owns about 260,000 acres (105,200 hectares) in that basin, mostly in Texas, Its operated and non-operated rigs averaged 193,000 barrels of oil equivalent per day in 2020, around 6% of its total output that year, according to its website.

It is the second sizable transaction announced by ConocoPhillips in the Permian inside a year: in January, it closed the all-stock purchase of Concho Resources (NYSE:).

The Wall Street Journal reported the news earlier on Monday.