Canadian Natural signs agreement to acquire Devon for $2.8bn

Oil and gas producer Canadian Natural Resources has signed an agreement to acquire the assets of Devon Canada in an all-cash deal of C$3.8bn ($2.8bn).

Expected to close on 27 June 2019, the transaction is subject to closing conditions and regulatory approvals.

Canadian Natural president Tim McKay said: “The assets provide us with the opportunity to add value through synergies, including facility consolidation and operating and marketing efficiency opportunities, with targeted benefits of C$135 million on an annualised basis.

“Through economies of scale, as well as complementary research and development efforts, we target to leverage technology advancements across the combined portfolio to drive continuous improvement, cost reductions and production optimisation.”

Canadian Natural executive vice-chairman Steve Laut added: “Canadian Natural will now have thermal in situ productive capacity of more than 320,000 bbl/d, with targeted 2019 exit production of approximately 250,000 bbl/d.

“At exit 2019, our targeted production balance will improve to 250,000 bbl/d of thermal in situ production, 450,000 bbl/d of oil sands mining and upgrading production, 150,000 bbl/d of conventional light crude oil and NGLs production, 120,000 bbl/d of heavy crude oil production and 220,000 BOE/d of natural gas production.”

Devon’s land and production sites are situated in Western Canada and lie within Canadian Natural’s core areas.

The asset base comprises 100% operated long-life low-decline thermal in situ production, as well as 95% operated conventional primary heavy crude oil production, both located next to existing Canadian Natural assets.

Furthermore, the acquired assets include 1.5 million acres of land, of which one million acres is undeveloped.

The acquisition will be fully financed by a C$3.25bn committed loan as part of the transaction.

TD Securities has been appointed as the financial adviser to Canadian Natural for the transaction.

Canadian Natural is a producer of oil and natural gas, with continuous operations in Western Canada, the UK portion of the North Sea and Offshore Africa. Devon is an energy firm producing oil and natural gas resources.