Oil prices rebound sharply on smaller-than-feared OPEC+ output hike
HOUSTON - Shell (LON:SHEL) Offshore Inc. and Shell Pipeline Company, subsidiaries of the global energy conglomerate Shell plc (market capitalization: $205.6 billion), have entered into an agreement to purchase an additional 15.96% working interest (WI) in the Ursa platform from ConocoPhillips (NYSE:COP) Company. According to InvestingPro data, Shell maintains strong financial health with an EBITDA of $58.5 billion and has consistently paid dividends for 21 consecutive years. This acquisition, which is contingent upon regulatory approval and other closing conditions, will increase Shell’s stake in the Ursa platform, its pipeline, and associated fields from 45.3884% to a maximum of 61.35%.
The Ursa platform, situated approximately 130 miles southeast of New Orleans within the Mars Basin, is a significant asset in Shell’s portfolio. It has been operational since 1999 and has produced over 800 million barrels of oil equivalent. With a robust free cash flow yield of 17% and strong operational metrics tracked by InvestingPro, Shell continues to demonstrate its operational excellence in the Gulf of Mexico. This deal also includes ConocoPhillips’ interests in the Ursa Oil Pipeline Company LLC, the Europa prospect, and an overriding royalty interest in Ursa.
Zoë Yujnovich, Shell’s Integrated Gas & Upstream Director, stated that the investment aligns with the company’s strategy to derive more value from its existing upstream assets and infrastructure. The acquisition is expected to enhance Shell’s free cash flow and provide additional avenues for growth, leveraging the Gulf of America’s low greenhouse gas intensity production.
Completion of the transaction is anticipated by the end of the second quarter of 2025, subject to the preferential rights election by other WI partners. The Ursa platform’s longevity and production history underscore Shell’s position as a leading operator in the Gulf of America, where it is one of the largest leaseholders.
Shell’s action to increase its WI in the Ursa platform underscores its commitment to securing domestic energy supplies and investing in high-margin, energy-efficient upstream assets. This move is part of Shell’s broader strategy to optimize its portfolio and strengthen its presence in key offshore areas. InvestingPro analysis suggests Shell is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which covers what really matters for informed investment decisions.
The information for this article is based on a press release statement from Shell Offshore Inc. and Shell Pipeline Company.
In other recent news, Shell has announced its final investment decision on the Bonga North deep-water project off the Nigerian coast. The project is set to include drilling and commissioning 16 wells and is projected to achieve a peak production rate of 110,000 barrels of oil per day by the end of the decade. Additionally, Shell is nearing a resolution in a valuation dispute with Thebe Investment Corp., potentially leading to the sale of its South African downstream assets for up to $1 billion. The agreement could result in a significant gain for Thebe, which initially valued its stake at $200 million.
In a separate development, Shell has withdrawn from the Atlantic Shores offshore wind farm project in the US, resulting in a write-off of nearly $1 billion. The decision was attributed to the project no longer aligning with Shell’s capabilities or expected returns. Furthermore, Egypt has secured 60 LNG cargoes for 2025 in deals with Shell and TotalEnergies (EPA:TTEF), ensuring the country’s LNG needs for that year are met. Shell also released energy scenarios projecting a significant rise in global LNG demand, with potential growth fueled by projects in Qatar and the United States.
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