Shell is planning to sell its foothold in the Eagle Ford Shale in South Texas, as it revamps its shale strategy following huge write-downs in the summer.
Shell, based in The Hague, is one of the first integrated oil companies to publicly back away from U.S. shale plays, acknowledging that the $2 billion dollar hit it took on its books from write-downs has led it to revamp its global strategy.
“We have decided to sell our Eagle Ford Shale asset in Texas,” said Kimberly Windon, a spokeswoman for Shell in a written statement. “We have progressed with the strategic review of our onshore shale assets and have identified assets that do not meet our global targets for materiality and scale.”
Rocky future: Shell pulls out of oil shale project
The announcement comes even as production in the Eagle Ford continues to grow. Eagle Ford Shale oil production hovers around 600,000 barrels a day, according to the Texas Railroad Commission. It is expected to reach 1 million barrels per day next summer, according to Jefferies & Co.
Shell’s 106,000 acres of leases are located in Dimmit, LaSalle, and Webb counties, in southern Texas and include 192 wells, producing approximately 32,000 barrels of oil equivalent per day.
The company declined to comment on potential buyers.
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