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Devon reaches $2.3B deal to sell acreage in six states

Devon Energy Corp. will receive $2.3 billion from Linn Energy for its natural gas-rich acreage in six states.
By Jay F. Marks, Staff Writer Modified: June 30, 2014 at 9:18 pm •  Published: July 1, 2014

It looks like Devon Energy Corp.’s rapid move from natural gas to oil will cost about $1 billion.

Devon on Monday announced a $2.3 billion deal to sell all of its domestic noncore assets to Linn Energy.

The Oklahoma City-based oil and natural gas producer sold its conventional natural gas assets in Canada earlier this year for $2.7 billion, allowing it to recoup most of the $6 billion it paid to move into south Texas’ oil-rich Eagle Ford Shale.

“With the sale of our remaining noncore 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 noncore properties.”

This year, Devon has acquired a leading position in the 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 multiyear 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.”

Devon now will focus on five core operating areas in Oklahoma, Texas and Canada’s oil sands, along with developing liquids plays in northern Oklahoma and Wyoming.

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