Devon Energy plans to raise up to $7.5 billion through asset sales
18 November 2009
One of the largest independent US oil and gas companies, Devon Energy Corporation (Devon) has revealed plans to divest all of its Gulf of Mexico as well as other international assets, in a move to focus on its core onshore portfolio in North America and repay its debt.
The company expects to generate $4.5 billion to $7.5 billion through the sale, and hopes that the strategic repositioning would be highly accretive to company's earnings, cash flow, and reserves beginning 2011.
Oklahoma City-based Devon is one of the world's leading independent oil and gas exploration and production companies (independent oil and gas companies are those with no downstream refining and marketing operations), and also owns natural gas pipelines and treatment facilities. The company's production mix consists of about 65 per cent natural gas and the balance oil and gas liquids.
Devon's operations are primarily focused in the US and Canada producing about 90 per cent of its output. The company also holds oil and gas assets in Azerbaijan, Brazil and China, and employs approximately 5,500 people worldwide.
Proved reserves of the company, based on 2009 year-end estimates stand at 2.8 billion barrels of oil equivalent (BOE). The assets earmarked for sale constitute about 7 per cent of Devon's total reserves.
Devon's chairman and chief executive J. Larry Nichols said in a statement: ''We do not believe that the value of our high-quality Gulf and international assets is being adequately reflected in our stock price. By monetizing these assets, we will realise their full value, allowing us to unleash the growth potential that resides within our world-class onshore assets."