EXCLUSIVE Exxon and Shell set to sell California oil and gas firm Aera – sources

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  • Companies in advanced talks to sell oil and gas company Aera
  • Shell has been looking to exit its aging California operations since 2021

HOUSTON/NEW YORK, Aug 31 (Reuters) – Exxon Mobil Corp (XOM.N) has joined Shell Plc (SHEL.L) in seeking to divest their joint venture Aera, and the duo are in advanced talks with a buyer for the California oil and gas producer, three people with knowledge of the matter said.

Demand for oil assets is growing as energy prices soar this year and as publicly traded companies abandon older businesses to reduce greenhouse gas emissions. Exxon and Shell have signaled their willingness to focus on larger-scale oil fields and liquefied natural gas projects. Read more

Aera is one of California’s largest oil producers, pumping 125,000 barrels of oil and 32 million cubic feet of natural gas daily, according to its website. The company generates approximately $1 billion a year in cash, bringing the value of any transaction to several billion dollars.

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Exxon and Shell declined to comment.

Reuters reported a year ago that Shell was seeking to exit the company, which operates primarily in central California’s San Joaquin Valley. Read more

Exxon joined in the effort, and the duo – assisted by financial adviser JPMorgan Chase – have been in talks with several potential buyers, some bidding solo and others in consortia, sources said.

JPMorgan declined to comment.

Shell and Exxon sold older properties and used the proceeds to pay down debt and invest in new areas. Shell this month launched the sale of its 30% stake in the Cambo oil prospect in Britain’s North Sea, Reuters reported, while Exxon cut its holdings around the world. Read more

Any deal could potentially see Exxon hit the $15 billion asset sale target it set four years ago. The company said it wants to focus on offshore projects in Guyana, Brazil and liquefied natural gas (LNG).

Exxon announced divestitures valued at more than $3 billion in the second quarter of this year, including in Texas, Canada and Romania. This quarter, it told Reuters it had agreed to sell shale gas properties in Arkansas. Read more

The US oil producer has put assets in the UK North Sea and Africa on the market, and last year completed a $1.1 billion sale of a US chemicals company. Read more

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Reporting by Sabrina Valle in Houston, David J. French in New York and Shariq Khan in Bangalore; Editing by Gary McWilliams, Rosalba O’Brien and Richard Pullin

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