Exclusive: Shell to sell C$4.1 billion stake in Canadian Natural -sources

Tue May 23, 2017 4:31pm EDT
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By John Tilak and David French

TORONTO/NEW YORK (Reuters) - Royal Dutch Shell Plc has decided to offload a roughly C$4.1 billion ($3 billion) stake in Canadian Natural Resources Ltd (CNRL) that it acquired as part of a deal to retreat from Canada's oil sands earlier this year, people familiar with the situation told Reuters.

The energy company has been interviewing investment banks to hire a financial adviser for the share sale, four people said in the past week, declining to be named as the discussions are confidential.

The deal could be one of the biggest-ever equity sales in Canada. The largest Canadian equity deal so far was TransCanada Corp's C$4.4 billion offering last year.

Shell and Canadian Natural declined to comment. Canadian Natural shares fell about 1 percent after the Reuters report and were trading down 2.1 percent at C$41.12 on Tuesday afternoon.

In March, Shell agreed to sell most of its Canadian oil sands assets for $8.5 billion, in a major strategic pullback from the capital-intensive business. As part of the transaction, Shell acquired about 98 million Canadian Natural shares, or about 8.8 percent of CNRL's outstanding shares, which are currently valued at about C$4.1 billion.

In a deal that saw another global player pulling back from the oil sands, ConocoPhillips in March agreed to sell some of its Canadian assets to Cenovus Energy Inc. As part of the transaction, ConocoPhillips acquired 208 million Cenovus shares, and Conoco now owns 16.9 percent of issued and outstanding Cenovus common shares.

Shell plans to use the proceeds to help pay down the debt it assumed with the acquisition of British rival BG Group, the people said. The company is weighing whether to sell its Canadian Natural stake in one block or phase it out, the people said.

Shell has sold or agreed to sell more than $20 billion in assets over the past two years to help finance the $54 billion BG acquisition last year. It plans to divest at least $10 billion more by 2018.   Continued...

FILE PHOTO - Shell's company logo is pictured at a gas station in Zurich April 8, 2015. REUTERS/Arnd Wiegmann/File Photo