Devon Sells Gas Assets to Focus on Oil Production

Posted by Eric Haun
Monday, June 30, 2014

Devon Energy Corp said it would sell its remaining non-core gas-rich properties to peer Linn Energy LLC for $2.3 billion to focus on more lucrative oil assets and cut debt.

This is Linn's biggest deal since it bought Berry Petroleum Co in December through a holding company set up for acquisitions.

The asset sale by Devon includes about 900,000 net acres spread across the Rockies, onshore Gulf Coast and some mid-continent regions, including all or parts of Kansas, Oklahoma, Texas, Arkansas and Louisiana.

These assets produce 275 million cubic feet of gas equivalent per day, about 80 percent of which is natural gas. They contributed about 7 percent to Devon's total oil and gas output in the first quarter.

Devon and many other North American oil and gas producers have been selling off their natural gas holdings to focus on more profitable crude oil assets. Prices of natural have slumped after a shale boom in the United States.

Encana Corp, Canada's largest natural gas producer , said last week it would sell its Bighorn gas properties in Alberta, properties in Wyoming's Jonah natural gas field and about 90,000 net acres in east Texas.

Devon itself has raised more than $5 billion from the sale of non-core assets over the past few quarters.

It sold off some natural gas assets in Canada late last year and bought oil-producing assets in the Eagle Ford shale region of south Texas.

The company said on Monday it expects to have reduced its net debt by more than $4 billion this year after the completion of the deal, likely by the end of the third quarter.

"With this sale, we now see a new Devon emerging with fourth quarter as the first clean quarter for the clean, go forward portfolio that is expected to deliver on peer leading growth," Global Hunter Securities analysts wrote in a note.

Oil and natural gas liquids are expected to account for about 60 percent of Devon's output by year-end, Chief Executive John Richels said, adding that the company was targeting multi-year oil production growth of more than 20 percent.

Linn said it would fund the deal by selling its Granite Wash assets spread over Texas Panhandle and western Oklahoma as well as other non-producing acreage. It has also secured a $2.3 billion loan.

Devon's shares were little changed at $79.49 in afternoon trading on the New York Stock Exchange. Linn's shares were up nearly 2 percent at $32.44 on the Nasdaq.

Jefferies LLC and Credit Suisse Securities (USA) LLC were financial advisers to Devon. Vinson & Elkins LLP was its legal adviser. Scotia Waterous was the financial adviser for Linn.

($1 = 1.0664 Canadian Dollars)

(Reporting by Anannya Pramanick in Bangalore; Editing by Don Sebastian and Saumyadeb Chakrabarty)

Maritime Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

Sapurakencana Wins 3 Petronas Oil blocks

SapuraKencana Petroleum Berhad today announced that it has entered into Sale and Purchase Agreements to acquire the entire interest of PETRONAS in 3 blocks offshore

Kemp Succeeds Semple at Wood Group

Wood Group announced following changes to its senior management team. Alan Semple, chief financial officer (CFO) has advised the board that he intends to

Baker Hughes to Present at Wells Fargo's 2014 Energy Symposium

Baker Hughes Incorporated announced today that the Company's Vice President and Chief Strategy Officer, Derek Mathieson, will present at Wells Fargo's 2014 Energy Symposium on Wednesday,

News

USCG Assist Duck Hunters Near Harrington Beach Park

The Coast Guard and the Port Washington and Cedar Grove Fire Departments came to the assistance of two duck hunters on Lake Michigan Friday. The names of those involved are not being released.

Sapurakencana Wins 3 Petronas Oil blocks

SapuraKencana Petroleum Berhad today announced that it has entered into Sale and Purchase Agreements to acquire the entire interest of PETRONAS in 3 blocks offshore

Kemp Succeeds Semple at Wood Group

Wood Group announced following changes to its senior management team. Alan Semple, chief financial officer (CFO) has advised the board that he intends to

Ferries

Gazprom Transgaz Ufa Organizes Arts Festival

Over 200 healthy children and children with disabilities from Bashkortostan as well as the Volga Region participated in the Breaking the Barriers second interregional children’s arts festival,

Energy Storage System Ordered for LNG Battery Hybrid Ferry

Norwegian hybrid to be the first LNG battery ferry to operate on commercial routes Corvus Energy, Siemens AS and Fjord1 have announced the award of the contract for the Fannefjord LNG hybrid ferry.

New Agency to Replace S. Korea Coast Guard after Ferry Disaster

South Korea launches a massive new government agency this week to handle emergency rescue and safety management seven months after a ferry disaster killed 304 people

Mergers & Acquisitions

Fulcrum Buys BMT Snyek Technologies

BMT Group announced the sale of BMT Syntek Technologies Inc to Fulcrum Corporation. Fulcrum Corporation, based in Arlington, VA., providies customized services

BEST Readies for Mega Ships

Hutchison Port Holdings Limited (HPH) subsidiary Barcelona Europe South Terminal (BEST), located at the Port of Barcelona, today held a ceremony for the arrival of three new Quay Cranes (QCs),

COSL Takes Delivery of New Semisub

China Oilfield Services Limited saw successful delivery of the deepwater semi-submersible drilling rig COSLProspector it invested in and commissioned to build in Yantai, Shandong today.

 
 
Maritime Security Naval Architecture Navigation Pod Propulsion Port Authority Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2169 sec (5 req/sec)