Shell Eyes LLOG Deal to Strengthen Its Gulf of America Portfolio

Shell plc SHEL is reportedly in advanced negotiations to acquire LLOG Exploration Offshore in a transaction valued at more than $3 billion. If finalized, the deal would mark a major strategic push to enhance Shell’s upstream position in the U.S. Gulf — one of its most important long-term growth regions.For a long time, Shell has been sharpening its portfolio through disciplined divestments and focused investments, exiting lower-value assets like its Colonial Enterprises stake while backing high-return projects, such as Nigeria’s HI gas development. Strong upstream performance — from early capacity achievements at Whale and Mero to ongoing progress in Nigeria, Brazil, and Oman — supports steady production and cash flow, helping the company maintain efficiency, resilience, and long-term profitability.LLOG- A Strategic Play for Upstream ExpansionLLOG currently delivers around 30,000 barrels of oil equivalent per day, with production expected to rise sharply toward 2030. Its assets, including the Salamanca development and the long-running Who Dat field, offer Shell a combination of stable output and future growth potential. LLOG’s recent acquisition of 41 deepwater blocks further strengthens the attractiveness of its portfolio.Why the Deal Matters for ShellShell’s growing upstream challenge makes expansion and strategic Mergers and Acquisitions (M&A) increasingly critical. The company predicts that its output is expected to decline to nearly 2.4 million barrels of oil equivalent a day by 2035 — leaving a roughly 500,000-boed shortfall — the company must act decisively to preserve its long-term production funnel. Years of limited exploration success and underinvestment have made large organic discoveries harder to secure, pushing Shell to look beyond traditional drilling to sustain volumes. As a result, targeted acquisitions and portfolio-building deals offer a faster, more reliable way to replenish reserves, stabilize output, and support Shell’s strategy of keeping production flat while strengthening the resilience of its upstream business.Shell also signaled its growing interest in selective M&A on its recent third-quarter earnings call, where CEO Wael Sawan highlighted the need for compelling M&A opportunities in 2026. Analysts have pointed to North American gas and deepwater oil as strong fits for Shell’s strategy, making LLOG’s asset base a natural complement. The addition would consolidate Shell’s existing leadership in the U.S. Gulf, a region prized for its longevity and cost-efficient development.Deal Expected Soon — but Not Yet GuaranteedAn agreement is close and could be finalized by year-end, though there is still no certainty as discussions remain private. Shell has declined to comment, and LLOG has yet to respond, leaving industry watchers awaiting further developments.If completed, the acquisition would represent a significant step in Shell’s ambition to deepen its upstream resilience and capitalize on high-quality Gulf of America resources poised for strong long-term returns.SHEL’s Zacks Rank & Key PicksLondon-based Shell is one of the primary oil supermajors, a group of U.S. and Europe-based big energy multinationals with operations that span almost every corner of the globe. Currently, SHEL has a Zacks Rank #3 (Hold).Investors interested in the energy sector may consider some top-ranked stocks like Baytex Energy Corp. BTE, Plains GP Holdings, L.P. PAGP and Natural Gas Services Group, Inc. NGS, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. The Zacks Consensus Estimate for BTE’s 2025 earnings indicates 9.5% year-over-year growth.Houston-based Plains GP Holdings, through its subsidiaries, is involved in the transportation, storage, terminalling and marketing of crude oil and refined products. The Zacks Consensus Estimate for PAGP’s 2025 earnings indicates 175% year-over-year growth.Natural Gas Services manufactures, fabricates, sells, rents and services natural gas compressors that enhance the production of natural gas wells. The Zacks Consensus Estimate for NGS’ 2025 earnings indicates 13.3% year-over-year growth.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Natural Gas Services Group, Inc. (NGS): Free Stock Analysis Report Baytex Energy Corp (BTE): Free Stock Analysis Report Plains Group Holdings, L.P. (PAGP): Free Stock Analysis Report Shell PLC Unsponsored ADR (SHEL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks