Devon Energy to provide dividend after Barnett Shale divestiture

US-based independent natural gas exploration company Devon Energy has announced its plans to return $100m to shareholders after closing its Barnett Shale asset sale in October.

In December last year, Devon Energy signed a definitive agreement to sell all of its assets in Barnett Shale to an affiliate of Kalnin Ventures’ investment business BKV Oil & Gas Capital Partners for $770m.

The Barnett Shale sale will also enable Devon to receive contingent cash payments of up to $260m based on future commodity prices.

Devon Energy also posted a loss of $670m in its Q2-2020 financial results, compared to a profit of $495m in the same period last year (Q2-2019).

The company plans to cut $300m in costs by the end of this year, adjust production targets, as well as reduce spending on drilling following disappointing Q2 financial results.

Devon Energy executive vice-president and chief financial officer Jeff Ritenour said: “As we navigate through the challenges presented by Covid-19, Devon continues to transform how it operates. The next phase of our strategic plan is to take meaningful and decisive steps to sustainably improve our cost structure and reduce debt.

“The aggressive reduction of cash costs across our organisation is expected to drive down per-unit expenses by an incremental 10% versus our second-quarter 2020 results.”

In May 2019, Canadian Natural Resources signed an agreement to acquire the assets of Devon Canada in an all-cash deal worth C$3.8bn ($2.8bn).

Devon Energy signed a $553m agreement in March 2018 to sell the southern portion of Barnett Shale.