Devon Energy Announces Additional $1 Billion of Upstream Asset Sales

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Devon Energy Corp. announced 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.

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.

 

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