Shell share price: Group to renegotiate Texas joint venture

Royal Dutch Shell (LON:RDSA) and Anadarko Petroleum are renegotiating their five-year-old joint venture in the Permian shale basin in Texas, Reuters has reported. The news came as the Anglo-Dutch oil major updated investors on its full-year performance yesterday, revealing a slump in earnings, coupled with a cash flow improvement and lower net debt as it continues to trim non-core assets.

Shell’s share price has been steady in London this morning, having added 0.62 percent to 2,179.00p as of 08:36 GMT, slightly outperforming the broader market, with the benchmark FTSE 100 index currently 0.26 percent higher at 7,159.22 points. The group’s shares have lost just under three percent of their value so far this year, as compared with a 0.25-percent rise in the Footsie.
Reuters quoted Shell’s outgoing finance chief Simon Henry as saying yesterday that the London-listed group and Texas-based Anadarko were renegotiating their 50-50 JV in the Delaware basin, which expires this year. The venture will likely see the operatorship of the asset “consolidated in a different way,” Henry pointed out, adding that the FTSE 100 group’s position in the Haynesville basin to the east of the Permian, which it acquired through its takeover of BG Group last year, “won’t necessarily stay in our portfolio”.

Shell’s plans to renegotiate its joint venture with Anadarko come in the midst of the Anglo-Dutch group’s $30-billion global asset disposal programme which the company launched in an effort to shore up its balance sheet in the wake of its acquisition of former smaller London-listed peer BG Group. Shell announced yesterday that the company was gaining momentum on its divestments, with some $15 billion completed last year. Earlier this week, the oil major announced sales of up to $4.7 billion, inking deals to offload assets in the North Sea and Thailand.
As of 08:59 GMT, Friday, 03 February, Royal Dutch Shell Plc ‘A’ share price is 2,179.50p.