OKLAHOMA CITY, Jun. 06 /BusinessWire/ --
Devon Energy Corp. (NYSE:DVN) announced today it has entered into
definitive agreements with undisclosed parties to monetize nearly $1
billion of non-core upstream assets in east Texas, the Anadarko Basin
and an overriding royalty interest in the northern Midland Basin. These
transactions are subject to customary terms and conditions and are
expected to close in the third quarter of 2016. The Company expects to
incur minimal taxes associated with these transactions.
"Combined with other recent asset sales, we have now announced $1.3
billion of gas-focused upstream divestitures. As we've said previously,
proceeds from these tax-efficient transactions will be utilized to
further strengthen our investment-grade financial position," said Dave
Hager, president and CEO. "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."
Transaction Details
The largest transaction is an agreement to divest upstream assets in
east Texas for $525 million. Net production from these properties
averaged 22,000 oil-equivalent barrels (Boe) per day in the first
quarter of 2016, of which approximately 5 percent was oil. 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 per day
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. At Dec. 31, 2015, proved
reserves associated with these 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 per day. The transaction does not include the
Company's working interest across 15,000 net acres in Martin County,
Texas that is being marketed separately.
Remaining Divestiture Assets
The Company continues to progress toward monetizing other non-core
upstream assets in the Midland Basin. Production associated with these
assets averaged approximately 25,000 Boe per day in the first quarter
and includes the aforementioned 15,000 net undeveloped acres in Martin
County.
Additionally, Devon is in advanced negotiations to sell its 50 percent
interest in the Access Pipeline in Canada. An announcement is
anticipated within the next several weeks.
Jefferies LLC acted as the lead financial advisor to Devon on the
transactions. RBC Richardson Barr also acted as a financial advisor to
Devon. Vinson & Elkins LLP acted as legal advisor to Devon.
About Devon Energy
Devon Energy is a leading independent energy company engaged in finding
and producing oil and natural gas. Based in Oklahoma City and included
in the S&P 500, Devon operates in several of the most prolific oil and
natural gas plays in the U.S. and Canada with an emphasis on a balanced
portfolio. The Company is the second-largest oil producer among North
American onshore independents. For more information, please visit www.devonenergy.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the federal securities laws. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
the control of the Company. These risks include, but are not limited to:
the failure to consummate the transactions due to unsatisfied closing
conditions or otherwise; the timing, amount of proceeds and ultimate
success of divesting the Company's other non-core assets; and the other
risks identified in the Company's Annual Report on Form 10-K and its
other filings with the Securities and Exchange Commission. Investors are
cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements. The
forward-looking statements in this press release are made as of the date
hereof, and the Company does not undertake any obligation to update the
forward-looking statements as a result of new information, future events
or otherwise.
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CONTACT:
Devon Energy Corp.
Investor Contacts
Howard Thill,
405-552-3693
Scott Coody, 405-552-4735
Chris Carr, 405-228-2496
Media
Contact
John Porretto, 405-228-7506