Devon Energy has plans to sell around $1bn of upstream assets across its US portfolio.
These non-core assets include some parts of the Barnett Shale focused primarily on Johnson County and other properties located principally within the company’s US resource base.
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Devon intends to start the divestiture programme in the second quarter of 2017 and complete the sale process over the next 12 to 18 months.
The company intends to use the proceeds from the divestment toward its US resource plays and to bolster its investment-grade financial position.
The company’s divesture plan of non-core assets is also expected to speed up its transition to higher-margin production.
Devon Energy president and CEO Dave Hager said: “The successful resource expansion in our world-class STACK and Delaware Basin assets has generated an abundance of opportunities within our portfolio.”
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By GlobalData“Given the multi-decade growth platform these franchise assets provide, we are taking this initial step to bring value forward from non-core assets and sharpen our focus on the highest-returning growth inventory in our portfolio.
“This divestiture programme, combined with our excellent liquidity and strong hedge position, supports our capital programme and places us firmly on track to achieve our production growth targets in 2017 and 2018.
“These strategic actions provide certainty for our future capital programmes and uniquely position Devon to maintain strong operational momentum through the end of the decade.”
The company stated that it possesses visible and sustainable growth opportunities within its portfolio and this growth opportunity is focused on the STACK and Delaware Basin, where Devon’s exposure amounts to more than 30,000 potential drilling locations, roughly one-third of which have been de-risked.
It also added that with ongoing STACK appraisal work and additional testing of the Leonard and Wolfcamp zones in the Delaware Basin, its risked resource base could expand further in the US.
After successful delineation work, the company would analyse strategic options for additional non-core asset sales.
Based in Oklahoma City, Devon Energy is an independent energy company engaged in finding and producing oil and natural gas.
