Devon Energy Corp. on Tuesday announced a $2.5 billion deal with a Chinese company for a share of its interests in five new resource plays.
Before this transaction, Devon assembled 1.2 million net acres in the Tuscaloosa Marine Shale, Niobrara, Mississippian, Ohio Utica Shale and the Michigan Basin.
Devon and Sinopec International Petroleum Exploration & Production Corp. recently added acreage in the Utica Shale, increasing their joint position in the play to 235,000 net acres.
The acquisitions added another $300 million to what was announced Tuesday as a $2.2 billion deal.
Sinopec will pay $900 million in cash when the deal closes. The company also will fund 70 percent of Devon's drilling costs until the remaining $1.6 billion is paid.
“This arrangement improves Devon's capital efficiency by recovering our land and drilling costs to date and by significantly reducing our future capital commitments,” Devon CEO John Richels said.
“We can accelerate the derisking and commercialization of these five plays without diverting capital from our core development projects.