Devon Energy Corp to sell almost $1 bn in oil and gas assets

Devon Energy Corp said yesterday it had agreed to sell Oklahoma and Texas oil and natural gas producing assets for around $1 billion.

According to the company, the sales which were heavily weighted towards natural gas production would be expected to close in the third quarter.

''Combined with other recent asset sales, we have now announced $1.3 billion of gas-focused upstream divestiture,'' Devon CEO Dave Hager said in a statement. ''As we've said previously, proceeds from these tax-efficient transactions will be utilised to further strengthen our investment-grade financial position.''

Under the deal, Devon agreed to sell producing assets in east Texas for $525 million, which averaged 22,000 barrels of oil equivalent per day in the first quarter. The properties had proven oil reserves of 87 million equivalent barrels as of the end of 2015.

Yesterday's announcement also includes a separate agreement to sell properties in the Anadarko Basin's Granite Wash, in western Oklahoma and the Texas Panhandle. The $310-million sale included average production of 14,000 equivalent barrels per day in the first quarter, of which 13 per cent was oil. The proven reserves at the end of 2015 were 31 million equivalent barrels.

With the asset sales Devon would be able to improve its balance sheet and help fund acquisitions in the Anadarko Basin STACK play and in Wyoming's Power River Basin that Devon bought in December for a combined $4.05 billion.

Hager added, with the current asset sales Devon was well on its way to achieving its earlier announced goal of selling $2 billion to $3 billion worth of assets this year.

Devon continued toward monetising other non-core upstream assets in the Midland Basin, which had an average production of about 25,000 boe/d (140 Mcfe/d) in Q1, including the 15,000 net undeveloped acres in Martin County, the company said.

Also Devon said it was in advanced negotiations to sell its 50 per cent interest in the heavy oil Access Pipeline in northeastern Alberta, Canada, and expected to announce a deal within the next several weeks.

"With oil prices having moved in our favour 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," Hager said.