Devon Energy to Unload Canada Business in $2.8 Billion Deal
May 29 2019 - 5:52AM
Dow Jones News
By WSJ Staff
Devon Energy Corp. (DVN) said it has agreed to sell its Canadian
business to Canadian Natural Resources Ltd. (CNQ.T) for $2.8
billion.
The Oklahoma City-based producer of oil and natural gas said
Wednesday that the transaction is expected to close by the end of
the second quarter. Proceeds from the deal will be used for debt
reduction, Devon said.
"The sale of Canada is an important step in executing Devon's
transformation to a U.S. oil growth business," Dave Hager, Devon's
chief executive, said in a news release. "This transaction creates
value for our shareholders by achieving a clean and timely exit
from Canada, while accelerating efforts to focus exclusively on our
high-return U.S. oil portfolio."
The company also said it is continuing to proceed with the
divestiture process for its Barnett Shale gas assets in north
Texas. Data rooms for the Barnett will open in the second quarter
of the year, and the company expects to shed the assets by the end
of 2019, Devon said.
Devon said its Canadian asset portfolio consists of heavy oil
assets principally located in the province of Alberta, with net
production averaging 113,000 oil-equivalent barrels in the first
quarter of the year.
At year-end 2018, proved reserves associated with these
properties amounted to approximately 409 million barrels of oil,
Devon said. Field-level cash flow accompanying these assets, which
excludes overhead costs, totaled $236 million in 2018, the company
said.
J.P. Morgan Securities LLC acted as lead financial adviser to
Devon on the Canada transaction, while Goldman Sachs also acted as
a financial adviser, the Oklahoma-based company said.
(END) Dow Jones Newswires
May 29, 2019 05:37 ET (09:37 GMT)
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