Devon Energy to sell Access Pipeline stake to CPPIB for $1.1 bn

Devon Energy Corp, one of the largest independent US oil and gas companies, yesterday struck a deal to sell its stake in Western Canada Access Pipeline to Canada Pension Plan Investment Board (CPPIB) for C$1.4 billion ($1.1 billion).

Devon may also get an additional $150 million if a planned thermal-oil project on Devon's Pike lease in Alberta goes ahead.

Under terms of the deal, Devon's thermal-oil acreage is dedicated to Access Pipeline for an initial term of 25 years. A market-based toll will be applied to production from the company's three Jackfish projects, which are fully operational.

As a result, Devon expects its lease operating expense at the Jackfish complex to increase by approximately $$100 million on an annualised basis.

''With the highly-accretive sale of Access, Devon's divestiture program is now complete with proceeds totaling $3.2 billion, surpassing the top end of our $2 billion to $3 billion guidance range,'' said Dave Hager, president and CEO of Devon.

''Furthermore, the divestiture proceeds significantly strengthen our investment-grade balance sheet and position us to further accelerate investment in our best-in-class US resource plays, led by the Stack and Delaware Basin,'' he added.

The Oklahoma-based company was seeking had earlier said that it would  sell $2 billion to $3 billion in assets this year in order to reduce debt, and help fund acquisitions in the Anadarko Basin Stack play and in Wyoming's Power River Basin that Devon bought in December 2015 for a combined $4.05 billion.

Last month, it agreed to sell Oklahoma and Texas oil and natural gas producing assets for around $1 billion. (See: Devon Energy Corp to sell almost $1 bn in oil and gas assets)