Devon Energy sells 50% stake in Access Pipeline to Wolf Midstream for $1.1bn

Devon Energy has completed the $1.1bn sale of its 50% stake in Access Pipeline to Wolf Midstream, a portfolio company of Canada Pension Plan Investment Board (CPPIB).

Devon will receive an incremental payment of $120m from Wolf Midstream once development has been approved of a new thermal-oil project on the company’s Pike lease in Alberta.  

Under the transaction initially announced in July, Devon’s thermal-oil acreage is dedicated to Access for an initial period of 25 years.

Pipelines that transport blended bitumen and diluent between the Christina Lake area of north-eastern Alberta and Edmonton form part of the Access Pipeline system.

Wolf Midstream CEO Gord Salahor said: "Access is an attractive foundational asset for Wolf that provides us with immediate scale as a midstream entity. 

“This asset has significant expansion potential and is well-positioned to interconnect with future midstream initiatives in the Fort Saskatchewan area. 

“With CPPIB's full ongoing support, we intend to actively pursue Access expansions, new acquisitions, and greenfield projects that add value for our customers in the oil and gas industry."

With the sale agreement in place, the Access Pipeline tolls will be reduced by 30% with the development of multiple projects at Pike in future.

Devon said with the close of Access Pipeline sale, the company’s total proceeds reached $3.2bn.

The company plans to use at least two-thirds of the sales proceeds to reduce debt, with $1.2bn of debt repurchased to date.