The acquisition from Chesapeake was $1.9B in 2012, the sale price now is $9.5B. On paper, seems like it all made money.
Anybody familiar with the Permian financials over the 2012-2021 time span? How much of a money pit was it? Or did it actually make $ from the operations???
business development folks probably slapping each other on the back for a job well done … get a bank to leak what the offer is close too. rounded to the nearest billion and then look good if it comes out that way ….. well done who cares what it is really worth nobody in the hague believed in that stuff anyway. what is next on the divest list ? aera surely. was rumored already and rumors have proven to be pretty accurate lately. no need for ben to comment on rumors. investors should take them seriously especially when they dont comment ….. do they ever do post mortems on divestments or disposals ? like the time when they did not even divest half of xom’s guyana deepwater block but simply walked away …..
They are recording an after tax gain on the deal of around 2.5 billion …. according to the news release ….. i dont think they had any write offs on the permian through the years (some notable recent deepwater field in the gom did though, but hey we got scale there so that is all that matters now apparently …..).
Well, now these money can be put to use in green energy, and will be wasted a lot quicker.
It's clear now that Aera stake will be sold, and all those mature deep water fields are goners too. JG99s will exit on schedule!
The Permian experiment was a net loss after the sale price. However, today's climate is different than it was 9 years ago, and this seems like a fair price that is comparable to other Permian acquisitions. Compared to Shell's other Shales sales, this is far better.
If I’m not mistaken, 2018 was the only cash flow positive year. As far as what the burn rate was, not sure
When you are making decisions you have to look at the present and not the past. If you look at the past (given that there was no hear shell Permian made money after capital spend) then it's called a sunk cost fallacy. Given everything going on today, shell got a great deal.