Devon Energy to sell non-core assets in US to White Star Petroleum for $200m

Devon Energy has signed an agreement to sell its non-core Mississippi Lime and Woodford Shale assets in the US to White Star Petroleum, in a transaction valued at $200m.

The assets will include about 210,000 largely contiguous net acres primarily located in Payne, Lincoln, Logan and Garfield Counties in Oklahoma.

During the first quarter of 2016, net production from the assets averaged 12,800 oil-equivalent barrels (boe) per day, from about 555 operated and non-operated Mississippi Lime and Woodford Shale horizontal wells, where approximately 30% was oil.

Proved reserves associated with these properties as at 31 December 2015 amounted to 11 million (boe).

Devon Energy president and CEO Dave Hager said: "This is another important step in executing on our plan to divest $2bn to $3bn of non-core assets across our portfolio during 2016.

"Proceeds will be used to further strengthen our investment-grade balance sheet. Additionally, this timely transaction accelerates Devon’s efforts to focus exclusively on its best-in-class resource plays in onshore North America."

Devon said it is marketing its 50% interest in the Access Pipeline in Canada, and efforts are in progress to monetise remaining upstream assets in the US.

White Star Petroleum CEO Elliot Chambers said: "With the acquisition of Devon’s Mississippi Lime and Woodford Shale assets, White Star has doubled its production and acreage footprint in Central Northern Oklahoma.

"This acquisition will be significantly accretive to production, liquidity, reserves, and leverage metrics, and will allow White Star to continue to leverage our core competency in low-cost Mississippian and Woodford resource development."

The transaction is subject to customary terms and conditions and is slated for completion in the second quarter of 2016.