Devon Energy to sell $1bn non-core upstream assets in US

Devon Energy has signed agreements with undisclosed parties to sell nearly $1bn of non-core upstream assets in east Texas in the US, the Anadarko Basin and a royalty interest in the northern Midland Basin.

The company plans to use proceeds from these transactions to strengthen its financial position.

Devon Energy president and CEO Dave Hager said: "Combined with other recent asset sales, we have now announced $1.3bn of gas-focused upstream divestitures.

"With oil prices having moved in our favour 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 programme are well on their way to achieving our previously announced range of $2bn to $3bn in 2016."

Devon initially signed an agreement to sell upstream assets in east Texas for $525m.

During the first quarter of this year, net production from these properties averaged 22,000 oil-equivalent barrels (boe) per day, of which about 5% was oil.

Proved reserves associated with these properties as on 31 December 2015 amounted to about 87 million boe.

Separately, the company has agreed to sell its non-core position in the Anadarko Basin’s Granite Wash area in a deal valued at $310m.

These properties had net production of 14,000boe per day in the first quarter of this year, 13% of which was oil.

Devon also signed an agreement to sell its overriding royalty interest across 11,000 net acres for $139m in the northern Midland Basin.

The deal excluded the company’s working interest across 15,000 net acres in Martin County, Texas.

The company is additionally holding talks to sell its 50% stake in Canada’s Access Pipeline.

The transactions are subject to customary terms and conditions and are expected to close in the third quarter of this year.