Shell PLC (SHEL) took a hit on Tuesday, with shares sliding as oil prices eased on fresh hopes for a Russia-Ukraine ceasefire and natural gas markets softened under forecasts predicting warmer-than-expected weather. But while the stock was down, the company was busy making moves to maximize its Gulf of America oil assets.

Shell's subsidiary announced it has made a final investment decision on a waterflood project at its Kaikias field in the U.S. Gulf of America. Translation: Shell is doubling down on getting every last drop of oil out of an already productive reservoir.

How the Waterflood Project Works

Here's the basic idea. The project will inject water into the reservoir that feeds Shell's Ursa platform in the Mars Corridor. This isn't just about pushing oil around—waterflooding is a proven secondary recovery method where injected water displaces oil and nudges it toward nearby production wells while keeping reservoir pressure stable. Think of it like squeezing the last bit of toothpaste from the tube, but with sophisticated engineering and millions of barrels at stake.

Shell expects to start injections in 2028, and the project should extend the Ursa platform's production life by several years. That's a meaningful win for an asset that's already been producing for years.

The Kaikias Field Background

The Kaikias field itself has an interesting history. Shell discovered it back in 2014, sitting in over 4,000 feet of water about 130 miles off the Louisiana coast. Production kicked off in 2018, flowing to Shell's Ursa platform. Shell owns 100% of the Kaikias field, but the Ursa platform is a joint operation where Shell holds a 61.35% stake, with BP taking 22.69% and ECP GOM III holding 15.96%. Shell recently bumped up its working interest in the platform.

The waterflood project is expected to unlock approximately 60 million barrels of oil equivalent in recoverable resources. That's not a trivial number, especially as Shell has committed to sustaining liquids production at 1.4 million barrels of oil equivalent per day through 2030.

Shell's Broader Moves

This investment fits into a broader pattern of strategic positioning. Recently, Shell finalized a deal with Equinor ASA (EQNR) to merge their U.K. offshore oil and gas operations into a new entity called Adura. The company is clearly focused on optimizing legacy assets and forming partnerships where it makes sense.

Shell's subsidiary, Shell International Trading Middle East Limited FZE, also signed a 15-year LNG deal with Abu Dhabi National Oil Company. Between the Gulf of America waterflood, the U.K. joint venture, and the Middle East LNG contract, Shell is playing chess across multiple boards.

SHEL Price Action: Shell shares were down 2.21% at $70.63 at the time of publication on Tuesday.