Shell Sells Former Enterprise Assets

Shell U.K. Limited has agreed to sell its non-operated 41.02564% equity interests in the producing Montrose, Arbroath and Arkwright fields (collectively known as "MonArb"), together with its 10% equity interest in the Foinaven East Field and 2.5% equity interest in the Magnus Area Fields (Magnus, Magnus South) plus associated infrastructure, to Energy North Sea Ltd (ENS) for an undisclosed cash consideration.

Shell has also agreed, in a separate transaction, to sell to Talisman North Sea Limited, for an undisclosed cash consideration, its non-operated equity interests in the producing fields Alba (2.25%), Caledonia (2.83%) and Orion (6.25%) along with exploration acreage (Blocks 15/19a, 15/28a, 15/28b, 16/18a, 16/23N, 16/26, 30/18W).

Both sales have an effective date of January 1, 2003 and are subject to Government consent and co-venturer approval.

Shell acquired its equity interests in these assets in 2002 as part of the purchase of Enterprise Oil plc. As part of Shell's ongoing strategic aim of portfolio management and rationalization, the sale of these non-core UK properties was announced in March of this year. The divestment of these assets has since taken place quickly and effectively with the buyers.

As Tom Botts, Managing Director of Shell U.K. Exploration and Production, pointed out: "When we acquired Enterprise last year, our plan all along was to divest selected assets from that acquisition that do not fit our core business. Shell remains committed to the UK and remains the largest producer in the UK Continental Shelf (UKCS). These divestments represent only 2% of our UK production. The UKCS is a heartland for Shell and will remain so. Since these assets are not central to our future plans in the UK, we chose to divest to companies who can realize the value of the fields more directly.

"In divesting MonArb, East Foinaven and Magnus to ENS we are able to provide a smaller new-entrant company with the opportunity to maximize its own portfolio in the UKCS. In the case of Alba, Caledonia, Orion and other exploration assets, Talisman will consolidate areas of its portfolio."

The sales are part of the Royal Dutch/Shell Group of Companies' on-going portfolio upgrading, expected to average some $2 billion per year of divestments. Last week Shell announced the sale of 26 shallow water mature upstream assets in the Gulf of Mexico to Apache, and the sale of its minority interest in Skeljungur, the Shell distributor in Iceland.