With oil prices at 90+ USD per barrel and increasing and the Permian asset being sold after June 2021 when the oil price was 60+ USD per barrel. It seems that Shell did the investment and ConocoPhillips is making the cash with little efforts. Great decision by GW, BvB and JU.
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An asset that was producing 150,000 boe/d at an oil price of 120 USD per barrel. Permian itself made 1 billion dollars in 2021 with an average of 60 USD per barrel. With the same production given that most of it was gas lift or ESP… Shell itself is going to leave billions for only one year!!
Shell has constantly bought high and sold low. Their M&A team is VERY arrogant but their results are terrible. Traverse City, Baker MO, onshore LA, Denver City and now Permian. Aera should have a consistent model. Drop the large overhead and take the cash. Henri Deterding would be disappointed
Selling Permian was a terrible decision.
Shell leaving Russia means Permian Divestment was even more ridiculous-!!
The future cash flows and pricing variability are built in. This isn't like selling a pickup truck on the cusp of repo. They can obviously take the proceeds and invest in the commodities side without all the drag of maintaining infrastructure, including the expense of employees.
Buy high sell low has always been the Shell way lol
I think about that every time I see the latest price of oil. Opportunities missed just to dump assets. Great move guys…..and gals.
No ragrets.
And to think of all the bonus money paid to individuals to juat get the deal done. There should be an after action review by neutral third party to evaluate if it was a good deal before a penny of bonus money is paid.