Devon to divest upstream assets for $1 billion

Jun 06, 2016 12:00 AM

Devon Energy Corp., Oklahoma City, said it is selling about $1 billion in upstream assets to undisclosed buyers. The sales are expected to be completed in this year’s third quarter.

Devon described the assets as noncore in East Texas, the Anadarko basin, and an overriding royalty interest in the northern Midland basin.

Dave Hager, president and chief executive officer, said proceeds from Devon’s 2016 divestiture program “are well on their way to achieving our previously announced range” of $2-3 billion. Divestitures announced to date total $1.3 billion.

The sale in East Texas is for $525 million. Net production in the first quarter averaged 22,000 boe/d, of which 5% is oil. Proved reserves at yearend were 87 million boe.

In the Anadarko basin’s Granite Wash area, Devon has agreed to sell its noncore position for $310 million. Net production in the first quarter averaged 14,000 boe/d, of which 13% is oil. Proved reserves amounted to 31 million boe.

In the northern Midland basin, Devon is selling its overriding royalty interest across 11,000 net acres for $139 million. Current production is about 1,000 boe/d. The transaction does not include Devon’s working interest across 15,000 net acres in Martin County, Tex., that is being marketed separately.

Devon said it is in advanced negotiations to sell its 50% interest in the Access Pipeline in Canada.

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