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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter January 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Energy

2016 a Busy Year for VLCC Deliveries - BIMCO

When it comes to delivering brand new VLCCs from shipyards in South Korea and China to owners and investor across the globe, 2016 is off to a flying start. Six

U.S. Okays ConocoPhillips Alaska LNG Exports

The U.S. Department of Energy approved ConocoPhillips' application to export about 40 billion cubic feet of natural gas from its Kenai liquefied natural gas export

Gamesa, Siemens Negotiating Wind Merger Terms

German engineering group Siemens and Spanish renewable energy group Gamesa are in final negotiations on a deal to merge their wind power assets, two sources familiar

News

US, India Consider Joint Patrols in South China Sea

The United States and India have held talks about conducting joint naval patrols that a U.S. defense official said could include the disputed South China Sea, a move that would likely anger Beijing,

No Need to Change Tug Workers’ Hours -Study

The American Waterways Operators (AWO), the national trade association for the tugboat, towboat and barge industry, hailed a study conducted for the Transportation

Danelec Marine Making Free ECDIS Upgrades

Ships with older Danelec ECDIS models are being upgraded to new hardware and software   Danelec Marine has launched a program to provide free upgrades of shipboard

Ferries

BMT Provides Ferry Design for River Murray

BMT Design & Technology Pty Ltd (BMT), a subsidiary of BMT Group Ltd, has completed a design project for the South Australian Government’s Department of Planning, Transport and Infrastructure (DPTI).

Meyer Turku Lays Keel of Tallink’s LNG Ferry

The keel of the Tallink’s new LNG-powered fast ferry Megastar was laid at the Meyer Turku shipyard   The hull assembly of Tallink’s new fast ferry Megastar started

PVA Elects 2016 Leadership

During the PVA Annual Convention at MariTrends 2016 held January 23-26 in Crystal City, Va., members of the Passenger Vessel Association (PVA) elected Margo Marks of Beaver Island Boat Company,

Mergers & Acquisitions

QP, Chevron Ink Offshore Moroccan Deal

Qatar Petroleum has reached an agreement with Chevron Morocco Exploration Ltd., a subsidiary of Chevron Corporation, to acquire a 30% participating interest from

R&M Group Merges with Sea Level Marine

R&M Ship Technologies USA, Inc. has merged Sea Level Marine, LLC. in efforts to increase the range of services offered to the company’s global client base. By aligning resources,

Shipping Line Consolidation: What Did the Airlines Do?

The container shipping industry is faced with the challenge of ever-decreasing freight rates that can only be served viably with larger, more efficient vessels.

 
 
Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Simulators Winch
rss | archive | history | articles | privacy | 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: 0.0776 sec (13 req/sec)