Devon Energy Corp. is selling most of its conventional assets in Canada for about $2.8 billion, the company announced Wednesday morning.
The deal with Canadian Natural Resources Limited follows Devon’s announced $6 billion move into south Texas’ oil-rich Eagle Ford shale.
“This agreement represents a significant step forward in the execution of our non-core divestiture process,” CEO John Richels said. “This tax-efficient transaction provides for a clean exit from our Canadian conventional business at a value of nearly 7 times 2013 EBITDA (earnings before interest, taxes, depreciation and amortization), a substantial premium compared to Devon’s current trading multiple.
“Furthermore, the timely execution of the largest piece of our non-core divestiture process accelerates the refocus on core assets.”
Devon expects to complete the sale of its non-core assets by the end of the year.
The Oklahoma City-based company intends to focus its operations on five core oil- and liquids-rich areas spanning North America, from its new holdings in southern Texas to Canada’s oil sands.
Devon will retain its acreage in emerging plays in northern Oklahoma and Wyoming, while looking to sell assets that are not expected to grow materially.
Its deal with Canadian Natural Resources is worth 3.125 billion in Canadian dollars, or about $2.8 billion.
Devon expects to net about $2.7 billion after bringing proceeds from the sale back into the U.S. to finance the Eagle Ford deal.