Devon Energy Corp. (NYSE: DVN) will sell all of its domestic noncore oil and gas properties to Linn Energy LLC (NASDAQ: LINE) for $2.3 billion, the company said June 30. The assets include properties in the Rockies, onshore Gulf Coast and Midcontinent, Devon added.
“With the sale of our remaining noncore assets, the portfolio transformation that we announced late last year is now complete,” said John Richels, president and CEO.
“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. The sale of Canadian and U.S. noncore properties over the past few months has generated in excess of $5 billion of proceeds at an accretive multiple of nearly 7 times 2013 EBITDA,” he added.
“Devon is now concentrated in some of the most attractive North America resource plays, with liquids expected to approach 60% of our production by year-end and multiyear oil production growth projected to be in excess of 20%,” Richels continued.
“In addition to creating a platform that supports competitive and high-margin growth, we remain committed to maintaining strong investment-grade credit ratings. Upon completion of this transaction we will have reduced our net debt by more than $4 billion this year,” he added.
The assets currently produce 275 million cubic feet equivalent per day (MMcfe/d) of gas (about 80% natural gas), Devon said. On Dec. 31, 2013, the assets’ proved reserves totaled 1.242 Tcfe of gas, and the EBITDA was $350 million, the company noted.
The sale is scheduled to close in 2014’s third quarter and had an effective date of April 1, the company said. Jefferies LLC was Devon’s lead financial advisor, while Credit Suisse Securities (USA) LLC was also a financial advisor, the company said. Vinson & Elkins LLP was Devon’s legal advisor, the company added.
Oklahoma City-based Devon Energy Corp. produces onshore oil and natural gas in North America.
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