By June 6, 2016 Read More →

Devon Energy to sell $1 billion of upstream assets in East Texas, Midland Basin

At Dec. 31, 2015, proved reserves for the assets amounted to 31 million Boe

assets

Dave Hager, president and CEO

OKLAHOMA CITY – Devon Energy Corp. says it has entered into agreements with undisclosed parties to sell nearly $1 billion of non-core upstream assets in east Texas, the Anadarko Basin and an overriding royalty interest in the northern Midland Basin.

The largest transaction is an agreement to divest upstream assets in east Texas for $525 million.

Net production from these properties averaged 22,000 boe/d per day in the first quarter of 2016, of which approximately 5 per cent was oil.

“Combined with other recent asset sales, we have now announced $1.3 billion of gas-focused upstream divestitures,” said Dave Hager, president and CEO.

“As we’ve said previously, proceeds from these tax-efficient transactions will be utilized to further strengthen our investment-grade financial position.”

Transaction Details

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/d 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. The company expects to incur minimal taxes associated with these transactions.

At Dec. 31, 2015, proved reserves for the 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/d.

“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,”said Hager.

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