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Shell (RDS.A) Plans to Divest Onshore Properties in Gabon


Per reports published by Reuters, integrated energy major Royal Dutch Shell plc RDS.A is in talks to divest its onshore operations in Gabon. This divestment is part of a $30 billion divestment plan of the company following BG Group buyout. The deal was completed in February.

Per sources, the potential bidders for the Anglo-Dutch group’s assets are the world's largest private equity fund – Carlyle Group, and independent European oil and gas company, Perenco. Also, they believe that the bids for the Gabon fields could be worth around $700 million.

Shell plans to make divestments of as much as $30 billion by exiting operations in five to 10 countries. It has, however, made relatively slow progress in this regard as the oil price rout dampened buyer enthusiasm for deals at the prices Shell is targeting. In 2016, Shell sold or agreed to sell around $6 billion of assets.

The Anglo-Dutch group’s divestment plans are targeted to weather the more than two-year downturn in oil prices and to improve its financials post the BG Group acquisition.

Headquartered in Hague, the Netherlands, Shell is one of the largest integrated oil and gas companies in the world. It explores for and extracts crude oil, natural gas and natural gas liquids. It has interests in chemicals as well as power generation and renewable energy. The company has been operating in Gabon for more than 50 years and operates the Rabi Kounga and Gamba fields in the country.

Shell currently carries a Zacks Rank #2 (Buy), which implies that the stock will outperform the broader U.S. equity market over the next one to three months.


Other well-ranked players from the broader energy sector include Braskem S.A. BAK, Ultra Petroleum Corp. UPLMQ and McDermott International Inc. MDR. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.

Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.

In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.

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