Anglo-Dutch oil corporation, Shell, has announced that it will sell its Permian assets to ConocoPhillips for $9.5 billion, making ConocoPhillips one of the largest Permian operators in 2022. The purchase is to boost the buyer’s daily production by nearly 200,000 barrels of oil equivalent.

The revenues from the purchase will be used to pay out an additional $7 billion in cash to shareholders, according to the company, “with the remainder used for further strengthening of the balance sheet.”

By the end of the year, the all-cash transaction should be completed.

Upstream Director at Shell, Wael Sawan, said: “After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition.”

“This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”

The decision to leave the Permian is assumed to be influenced by a Dutch court ruling earlier this year that ordered Shell to significantly reduce its carbon footprint, although after the ruling, the company’s Chief Executive, Ben van Beurden, stated that just because Shell sells its oil assets does not mean that global emissions will decrease because the assets will still be developed by someone else.

Shell’s stock price jumped as a result of the news, according to data from oilprice.com. The price of one share of Royal Dutch Shell (NYSE: RDS.A) was up 4.68% at $41.34 at 9:49 a.m. ET on Tuesday, September 21st, 2021.