Devon Energy Completes Natural Gas Exit
Devon Energy, once a major North American natural gas producer, said December 17 it has completed its transformation to an “oil growth business” by agreeing to sell its legacy Barnett shale assets in Texas to Thailand’s Banpu Kalnin Ventures (BKV) for US$770mn.
“Devon’s transformation to a US oil growth business is now complete,” Devon CEO Dave Hager said, noting that the Barnett sale, along with the company’s exit from Canada earlier this year, generated proceeds totaling US$3.6bn. Canadian Natural Resources bought Devon’s Canadian assets for C$3.8bn (US$2.8bn) in June.
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The transactions, Hager said, “accelerate efforts to focus exclusively on our resource-rich US oil portfolio, where we have the ability to substantially increase returns, margins and profitability.”
The Barnett shale has been a cornerstone of Devon’s North American operations for the past 20 years, the company said, and net production from there averaged 597mn ft3/day in 3Q 2019. Proved reserves, at December 31, 2018, were estimated at 4 trillion ft3 of natural gas.
With the acquisition, BKV will become a significant natural gas producer in the US, with production of more than 780mn ft3/day from the Marcellus basin in the northeast and the Barnett in Texas.
“This deal represents our continued belief in the long-term potential of US shale gas and is fully in line with Banpu’s vision of developing a greener and smarter energy portfolio,” BKV CEO Christopher Kalnin said.
The transaction is expected to close in 2Q 2020, subject to customary terms and conditions.