Shell divests stake in Caesar-Tonga
Shell has signed an agreement to sell its 22.45% non-operated interest in the Caesar-Tonga asset in the deepwater US Gulf of Mexico to Delek CT Investment LLC for $965 million in cash.
HOUSTON– Shell Offshore Inc. has signed an agreement to sell its 22.45% non-operated interest in the Caesar-Tonga asset in the deepwater US Gulf of Mexico to Delek CT Investment LLC, a subsidiary of Delek Group Ltd.
The total consideration for this deal is $965 million in cash.
The sales and purchase agreement is subject to certain conditions, including regulatory approvals. The transaction is likely to close by the end of 3Q 2019, with an effective date of Jan. 1, 2019.
Andy Brown, Upstream Director, Royal Dutch Shell, said: “This transaction represents our continued focus on strategically positioning ourdeepwater business for growth and is consistent with our upstream strategy of pursuing competitive projects that deliver value in the 2020s and beyond.
“The sale will contribute to Shell’s ongoing divestment program and allow us to direct resources to the areas where we see the most value in the longer term.”
Caesar-Tonga lies in Green Canyon blocks 683, 726, 727, and 770 in water depths of about 4,921 ft (1,500 m). Located 190 mi (306 km) from New Orleans, the development consists of three discoveries: Caesar, Tonga, and Tonga West. They were combined into one project and developed as a subsea tieback to the Anadarko-operated Constitution spar.
Production began in 2012 and currently averages more than 70,000 boe/d total gross.
Anadarko Petroleum Corp. is the operator and holds 33.75%. Co-owners are Equinor (23.55%) and Chevron (20.25%).
As part of the transaction, Delek Group will sign a long-term off-take agreement with Shell Trading (US) Co. to purchase oil produced from the field for a period of 30 years at either market prices or prices matched to-third party offers.
Asaf Bartfeld, president and CEO of Delek Group, said: “This is a strategic opportunity, which provides the group access to a producing oil asset with significant proven reserves, with a strong cash flow and partnership with leading players in the global energy market.”