Devon Energy Sells $200 Million in Reserves, Sees Deals Aheadby
Driller sells Oklahoma wells to White Star Petroleum
Company on track to unload up to $3 billion in 'non-core' land
Devon Energy Corp. is selling $200 million worth of Oklahoma oil and natural gas reserves to White Star Petroleum LLC, continuing a plan to unload properties in the face of the worst rout in crude prices in a generation.
Devon expects to close the deal in the second quarter and is on track to complete $2 billion to $3 billion in asset sales by year’s end, the Oklahoma City-based explorer said in a statement Wednesday. The assets, part of an oil formation known as the Mississippian Lime, produced the equivalent of 12,800 barrels of oil a day on average, with proved reserves estimated at 11 million barrels.
The company, like rival U.S. oil explorers, has cut spending and production, laid off workers and slashed its dividend this year as it copes with oil prices that fell as much as 70 percent over the last two years. Chief Executive Officer David Hager said Devon expects an announcement by June on efforts to sell a 50 percent stake in the Access Pipeline in Canada and is also progressing on other potential deals.
Shares fell 0.7 percent to $33.38 at 9:51 a.m. in New York. Devon is down about 50 percent in the past year.
The Oklahoma sale “will be used to further strengthen our investment-grade balance sheet," Hager said in the statement. “This timely transaction accelerates Devon’s efforts to focus exclusively on its best-in-class resource plays in onshore North America.”
White Star Petroleum, based in Oklahoma City, announced Wednesday that it had changed its name from American Energy - Woodford LLC. It’s one of the businesses spun off from American Energy Partners LP, the company founded by Aubrey McClendon, the shale drilling pioneer who died last month.