Oklahoma City's Devon Energy Corp. seals joint venture with Japanese firm

Devon Energy Corp. will partner with Japan's Sumitomo Corp. to speed development of two shale plays in west Texas' Permian Basin.
by Jay F. Marks Modified: August 2, 2012 at 9:01 am •  Published: August 2, 2012

Devon Energy Corp. has found another business partner in the Far East.

Devon on Wednesday announced a $1.4 billion joint venture with Japan's Sumitomo Corp., which describes itself as a general trading company operating in a variety of fields. The company in 2009 became the first Asian firm to get involved in the production of natural gas from shale, according to its website.

Sumitomo will acquire 30 percent of Devon's acreage in two oil-rich Permian Basin plays, while paying for the bulk of the Oklahoma City company's drilling costs in west Texas over the next two years.

“This arrangement will materially enhance Devon's future returns and improve our capital efficiency,” Devon CEO John Richels said in a statement. “It will also further enhance our financial strength.”

Sumitomo has an oil field service and supply business, which sells steel tubing to Devon, a Devon spokesman said.

The Sumitomo deal, which involves about 650,000 acres in the Cline and Midland-Wolfcamp shale plays, is Devon's second joint venture this year with an Asian company.

Devon closed a $2.5 billion deal with China's Sinopec International Petroleum Exploration & Production Corp. in April, with Sinopec gaining a stake in five developing U.S. shale plays.

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by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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