Devon Energy Announces Additional $1 Billion of Upstream Asset Sales
June 06 2016 - 6:00AM
Business Wire
Devon Energy Corp. (NYSE: DVN) announced today it has entered
into definitive agreements with undisclosed parties to monetize
nearly $1 billion of non-core upstream assets in east Texas, the
Anadarko Basin and an overriding royalty interest in the northern
Midland Basin. These transactions are subject to customary terms
and conditions and are expected to close in the third quarter of
2016. The Company expects to incur minimal taxes associated with
these transactions.
“Combined with other recent asset sales, we have now announced
$1.3 billion of gas-focused upstream divestitures. As we’ve said
previously, proceeds from these tax-efficient transactions will be
utilized to further strengthen our investment-grade financial
position,” said Dave Hager, president and CEO. “With oil prices
having moved in our favor throughout the sales process, we are
encouraged by the interest and progress in marketing our remaining
non-core oil assets in the Midland Basin and Access Pipeline in
Canada. Proceeds for the entire divestiture program are well on
their way to achieving our previously announced range of $2 billion
to $3 billion in 2016.”
Transaction Details
The largest transaction is an agreement to divest upstream
assets in east Texas for $525 million. Net production from these
properties averaged 22,000 oil-equivalent barrels (Boe) per day in
the first quarter of 2016, of which approximately 5 percent was
oil. Field-level cash flow accompanying these assets, which
excludes overhead costs, totaled $10 million in the first quarter.
At Dec. 31, 2015, proved reserves associated with these properties
amounted to approximately 87 million Boe.
In a separate transaction, the Company agreed to sell its
non-core position in the Anadarko Basin’s Granite Wash area for
$310 million. Net production associated with these properties
averaged 14,000 Boe per day in the first quarter of 2016, of which
13 percent was oil. Field-level cash flow accompanying these
assets, which excludes overhead costs, totaled $6 million in the
first quarter. At Dec. 31, 2015, proved reserves associated with
these properties amounted to 31 million Boe.
In the northern Midland Basin, Devon entered into an agreement
to sell its overriding royalty interest across 11,000 net acres for
$139 million. Current production from this overriding royalty
interest is approximately 1,000 Boe per day. The transaction does
not include the Company’s working interest across 15,000 net acres
in Martin County, Texas that is being marketed separately.
Remaining Divestiture Assets
The Company continues to progress toward monetizing other
non-core upstream assets in the Midland Basin. Production
associated with these assets averaged approximately 25,000 Boe per
day in the first quarter and includes the aforementioned 15,000 net
undeveloped acres in Martin County.
Additionally, Devon is in advanced negotiations to sell its 50
percent interest in the Access Pipeline in Canada. An announcement
is anticipated within the next several weeks.
Jefferies LLC acted as the lead financial advisor to Devon on
the transactions. RBC Richardson Barr also acted as a financial
advisor to Devon. Vinson & Elkins LLP acted as legal advisor to
Devon.
About Devon Energy
Devon Energy is a leading independent energy company engaged in
finding and producing oil and natural gas. Based in Oklahoma City
and included in the S&P 500, Devon operates in several of the
most prolific oil and natural gas plays in the U.S. and Canada with
an emphasis on a balanced portfolio. The Company is the
second-largest oil producer among North American onshore
independents. For more information, please visit
www.devonenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company. These risks
include, but are not limited to: the failure to consummate the
transactions due to unsatisfied closing conditions or otherwise;
the timing, amount of proceeds and ultimate success of divesting
the Company’s other non-core assets; and the other risks identified
in the Company’s Annual Report on Form 10-K and its other filings
with the Securities and Exchange Commission. 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 hereof, and the Company does not undertake any obligation
to update the forward-looking statements as a result of new
information, future events or otherwise.
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version on businesswire.com: http://www.businesswire.com/news/home/20160606005345/en/
Devon Energy Corp.Investor ContactsHoward Thill,
405-552-3693Scott Coody, 405-552-4735Chris Carr,
405-228-2496Media ContactJohn Porretto, 405-228-7506
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