Devon Energy Corp., Oklahoma City, (NYSE: DVN) has acquired the Barnett Shale E&P properties in North Texas of privately owned Chief Holdings LLC for $2.2 billion in cash, including assumed liabilities. The properties have estimated proved reserves of 617 billion cubic feet of gas equivalent on some 169,000 net acres and production of approximately 55 million cubic feet of gas equivalent per day. An additional 31 wells are awaiting completion and pipeline connection, which will add 30 million cubic feet of gas equivalent per day. Devon plans to drill approximately 800 wells on the acreage during the next five years to produce some 2 trillion cubic feet of gas equivalent. Devon is the largest producer in the Barnett Shale, producing approximately 600 million cubic feet equivalent per day from about 2,200 wells. Devon expects companywide production approaching 300 million barrels of oil equivalent in 2009. “This was a unique opportunity to add to Devon’s position in the hottest natural gas play in North America where Devon is already the largest and most active producer,” says J. Larry Nichols, Devon chairman and chief executive. “With the addition of Chief’s lease position, Devon’s Barnett Shale acreage will expand to 720,000 net acres.” Devon funded the acquisition with approximately $900 million of cash on hand and $1.3 billion of short-term borrowings, and as a result of the acquisition, expects to increase its 2006 capital budget for exploration and development by approximately $125 million. “As with Mitchell Energy in 2002, the value of Chief to Devon is not fully reflected in current production or booked reserves. The true value lies in the trillions of cubic feet of gas underlying its acreage in the shale, gas that Devon has the knowledge, capital and resources to develop and produce,” says Nichols. Devon’s successful bid was made jointly with midstream Dallas-based Crosstex Energy Services (Nasdaq: XTEX), which has acquired Chief’s midstream assets for $480 million. “Crosstex is the logical and best-positioned owner for Chief’s gathering assets,” Nichols adds. Petrie Parkman & Co. advised Chief on the deal.