Devon Reaches Deals to Shed Midland Basin Assets
June 15 2016 - 7:20PM
Dow Jones News
Devon Energy Corp. reached two separate deals to divest itself
of noncore assets in the Midland Basin in Texas for a combined $858
million.
Pioneer Natural Resources Co. agreed to acquire assets in the
northern Midland Basin from Devon for $435 million, expanding the
shale-driller's presence in the region.
In a separate transaction, Devon will sell assets in the
southern Midland Basin for $423 million. Devon didn't disclose the
identity of the buyer.
Oklahoma City-based Devon said the two deals bring its announced
planned divestitures of noncore assets to $2.1 billion, part of its
efforts to improve its balance sheet.
Devon Chief Executive Dave Hager said the company expects its
"total noncore asset sales to be at or above the top end of our $2
billion to $3 billion guidance, with the sale of our 50% interest
in the Access pipeline."
Devon and Pioneer both boosted their capital spending plans for
the year.
For its part, Devon raised its 2016 upstream capital spending
guidance by $200 million to a total of between $1.1 billion and
$1.3 billion.
The deal with Dallas-based Pioneer, expected to close in the
third quarter, includes roughly 28,000 net acres, with net daily
production of about 1,000 barrels of oil equivalent. Oil comprises
roughly 70% of the production. The assets are near certain Pioneer
acreage in the Wolfcamp shale, with more than half in an area where
the company says it has drilled some of its most productive
wells.
Pioneer also plans to add five horizontal drilling rigs in the
second half of this year. The added rigs are expected to increase
Pioneer's 2016 capital budget by roughly $100 million to a total of
$2.1 billion.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
June 15, 2016 19:05 ET (23:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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