Devon Energy Announces $2.3 Billion Sale of U.S. Non-Core Assets
June 30 2014 - 9:00AM
Business Wire
Devon Energy Corporation (NYSE:DVN) today announced that it has
entered into a definitive agreement to sell all of its non-core
U.S. oil and gas properties to Linn Energy (Nasdaq: LINE, LNCO) for
$2.3 billion, or approximately $1.8 billion after tax. The
agreement covers Devon’s remaining assets targeted for divestiture
and includes properties in the Rockies, onshore Gulf Coast, and
Mid-Continent regions of the U.S.
“With the sale of our remaining non-core assets, the portfolio
transformation that we announced late last year is now complete,”
said John Richels, president and chief executive officer. “In a
short period of time we transformed our portfolio through three
significant steps: the accretive Eagle Ford entry, the innovative
creation of EnLink Midstream, and the sale of our non-core
properties. The sale of Canadian and U.S. non-core properties over
the past few months has generated in excess of $5 billion of
proceeds at an accretive multiple of nearly 7 times 2013
EBITDA.”
“Devon is now concentrated in some of the most attractive North
America resource plays, with liquids expected to approach 60
percent of our production by year-end and multi-year oil production
growth projected to be in excess of 20 percent,” said Richels. “In
addition to creating a platform that supports competitive and
high-margin growth, we remain committed to maintaining strong
investment-grade credit ratings. Upon completion of this
transaction we will have reduced our net debt by more than $4
billion this year.”
Devon’s production from these non-core U.S. assets is currently
275 million cubic feet of gas equivalent per day, of which
approximately 80 percent is natural gas. At December 31, 2013,
proved reserves associated with these properties amounted to 1.242
trillion cubic feet of gas equivalent. EBITDA accompanying these
assets totaled $350 million in 2013.
The transaction is subject to customary terms and conditions and
is expected to close in the third quarter of 2014, with an
effective date of April 1, 2014.
Jefferies LLC acted as lead financial advisor to Devon on the
transaction. Credit Suisse Securities (USA) LLC also acted as a
financial advisor to Devon on the transaction. Vinson & Elkins
LLP acted as legal advisor to Devon.
Devon Energy Corporation is an Oklahoma City-based independent
energy company engaged in oil and gas exploration and production.
Devon is a leading U.S.-based independent oil and gas producer and
is included in the S&P 500 Index. For additional information,
visit www.devonenergy.com.
This press release includes "forward-looking statements" as
defined by the Securities and Exchange Commission (SEC). Such
statements are those concerning strategic plans, expectations and
objectives for future operations. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that the company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the company. These risks are identified in
our Form 10-K and our other filings with the SEC. Investors are
cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
The forward-looking statements in this press release are made as of
the date of this press release, even if subsequently made available
by Devon on its website or otherwise. Devon does not undertake any
obligation to update the forward-looking statements as a result of
new information, future events or otherwise.
Devon Energy CorporationInvestor ContactsHoward Thill,
405-552-3693orScott Coody, 405-552-4735orShea Snyder,
405-552-4782orMedia ContactTim Hartley, 405-552-4994
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