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Devon Energy signs deal to sell Barnett Shale assets in US

EBR Staff Writer Published 08 March 2018

Devon Energy has signed an agreement to sell the southern portion of its Barnett Shale position to an undisclosed firm for $553m.

Currently, the net production capacity from the southern Barnett divestiture assets, which are located primarily in Johnson County, are averaging 200 million cubic feet of gas-equivalent per day.

The remaining assets in the Barnett Shale reside in Denton, Wise and Tarrant counties. They have current production capacity of 680 million cubic feet of gas-equivalent per day.

Devon Energy expects the field-level cash flow accompanying these assets, excluding overhead costs, to be approximately $100m in the current year.

Subject to customary terms and conditions, the transaction is scheduled to be completed in the second quarter of 2018.

Devon Energy president and CEO Dave Hager said: “Combined with other recent asset sales, divestiture proceeds associated with our 2020 Vision have now reached $1bn.”

The firm has also announced its plan to reduce debt associated with its upstream business.

Hager said: “With our disciplined multi-year plan, we expect to generate substantial amounts of excess cash flow at prices above our base planning scenario of $50 WTI pricing and through additional portfolio simplification efforts.”

Last month, the firm announced it had allocated capital budget of $2.2bn to $2.4bn for 2018 for upstream projects.

The investment is expected to boost its oil production capacity in the US by approximately 14% compared to 2017.

At that time, the firm said: “The trajectory of Devon’s U.S. oil production profile is expected to steadily advance throughout the year and exit 2018 at rates more than 25 percent higher than the 2017 average.”

Image: Devon Energy intends to reduce its debt associated with its upstream business. Photo: courtesy of Rosemary Ratcliff/FreeDigitalPhotos.net.