U.S. oil and gas independent Devon Energy said this morning it’s selling its Canadian assets to Canadian Natural Resources Ltd. for C$3.8 billion ($2.81 billion) in cash, Kallanish Energy reports.
Devon is one of several oil producers to invest in the Anadarko Bain’s Scoop and Stack plays in Oklahoma, which is seen by some industry players as a cheaper alternative to the overheating Permian Basin.
“The sale of Canada (assets) is an important step in executing Devon’s transformation to a U.S. oil growth business,” Devon CEO Dave Hager said, in a statement.
As the company focuses more on U.S. oil growth, Devon is also it’s also divesting its Barnett Shale gas assets in North Texas. Data rooms for the Barnett will open shortly and Devon expects to exit the assets by the end of the year.
Oklahoma-based Devon’s Canadian portfolio consists of oil sands assets principally located in Alberta Province, with net production averaging 113,000 barrels of oil-equivalent barrels per day (Boe/d) in 2019’s first quarter.
At the end of 2018, proved reserves associated with the properties totaled roughly 409 million Boe (Mmboe).
“The assets provide us the opportunity to add value through synergies … with targeted benefits of C$135 million ($99.98 million) on an annualized basis,” Canadian Natural Resources president Tim McKay said, in a statement.
The deal is expected to close by June 27, Canadian Natural said. Devon will use proceeds to pay down debt.
J.P. Morgan Securities and Goldman Sachs served as financial advisers to Devon on the deal, while TD Securities was the financial adviser to Canadian Natural.
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