Spread across 225,000 net acres, the producing properties considered for sale are located entirely in the Delaware Basin in Texas, US.
These properties have current production of nearly 175,000 barrels equivalent per day (boe/d).
ConocoPhillips will also acquire more than 965.6km of operated crude, gas, and water pipelines, and infrastructure as part of the deal.
Shell upstream director 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.
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“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.”
Shell plans to use the cash proceeds from the deal for funding $7bn in additional shareholder distributions. The rest of the proceeds will be used to further consolidate its balance sheet.
ConocoPhillips expects the transaction to be complementary and highly accretive.
The US-based firm said that the combination of Shell’s assets and its multi-basin Lower 48 portfolio will allow it to deliver considerable incremental upside.
The deal, which is subject to regulatory clearance and other customary closing conditions, is planned to be closed in the fourth quarter of 2021.
Separately, ConocoPhillips announced plans to increase its targeted level of dispositions by $2bn to $5bn by 2023.
The dispositions are planned to be sourced primarily from the Permian Basin as part of the firm’s portfolio high-grading efforts.