Shell is nearing an agreement to acquire LLOG Exploration Offshore, one of the largest privately owned operators in the US Gulf of Mexico, in a transaction valued at over $3 billion, two sources familiar with the matter told Reuters.

The discussions are reportedly in their final stages, with one source indicating that an agreement could be finalized before the end of the year. However, both sources emphasized that the talks remain confidential and that a deal is not yet guaranteed.

If completed, the acquisition would significantly expand Shell’s upstream footprint by adding LLOG’s extensive deepwater and ultra-deepwater assets to its portfolio.

LLOG currently produces approximately 30,000 barrels of oil equivalent per day (boe/d), with output projected to rise sharply toward the end of the decade, according to Ross Lubetkin, CEO of Welligence.

Reports first emerged in October that the Louisiana-based company was considering a sale. LLOG specializes in exploration, development, and production across the Gulf of Mexico, with a primary focus on deepwater operations.