Royal Dutch Shell has promised to give its investors three-quarters of the proceeds from selling assets in the Permian Basin to ConocoPhillips. Analysts estimate that it would be equal to a $7-billion payout. The surprise payout came just two months after the Anglo-Dutch company increased its dividend by nearly 40% and launched $2 billion of share buybacks. Analysts said the moves signified Shell’s efforts in regaining investors’ faith after slashing payout sharply last year due to the COVID-19 pandemic.
Following the news on the unexpected payout, Shell’s Class B shares rose 4.3% to 1,492 pence at 11:19 AM in London. Shell will also use $2.5 billion from the proceeds to repay debts. The company’s board is expected to formalize the final decision regarding the proceeds in the fourth quarter of 2021 when the transaction officially closes. The $7-billion payout will come on top of the previously pledged 20%-30% increase in cash flow from operations distributable to investors.
