June 30--Devon Energy Corp. has struck a $2.3 billion deal to sell all of its non-core assets to Linn Energy.
The deal involves nearly 900,000 acres in six states, areas outside of what Devon identified last year as its core operating plays
"With the sale of our remaining non-core assets, the portfolio transformation that we announced late last year is now complete," CEO John Richels said. "In a short period of time we transformed our portfolio through three significant steps: the accretive Eagle Ford entry, the innovative creation of EnLink Midstream, and the sale of our non-core properties."
This year, Devon has spent $6 billion to buy into the oil-rich Eagle Ford Shale, spun off its midstream assets in a merger with CrossTex Energy LLC and netted $5 billion from the sale of unwanted assets in the U.S. and Canada.
"Devon is now concentrated in some of the most attractive North America resource plays, with liquids expected to approach 60 percent of our production by year-end and multi-year oil production growth projected to be in excess of 20 percent," Richels said. "In addition to creating a platform that supports competitive and high-margin growth, we remain committed to maintaining strong investment-grade credit ratings."
Richels said Devon will have slashed its debt by more than $4 billion this year once its latest round of asset sales is complete.
Linn is buying acreage that currently produces about 275 million cubic feet of natural gas equivalent a day from about 4,500 wells.
The Houston-based company has identified more than 1,000 future drilling locations and more than 600 recompletion opportunities on the acreage, which has a total resource potential of about 3 trillion cubic feet of natural gas equivalent.
As it adds Devon's acreage across the Rockies, Mid-Continent, east Texas, north Louisiana and south Texas, Linn intends to sell its position in the Granite Wash and Cleveland plays in western Oklahoma and the Texas Panhandle.
Linn is operating four rigs in those plays, which currently produces 230 million cubic feet of liquids-rich natural gas a day.
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