Devon to Shed Assets, Focus on US Oil

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Devon to Shed Assets, Focus on US Oil

Devon Energy Corp. plans by yearend to sell or spin off its heavy oil properties in Canada and gas production in the Barnett shale to focus on US oil.

The company has hired advisors for each group of assets to be separated. It will open data rooms by this year’s second quarter.

In Canada, Devon in 2017 produced 131,000 boe/d net to its interests (98% liquids) via steam-assisted gravity drainage in the Athabasca region of Alberta and cold flow in Saskatchewan.

Its average 2017 net production from the Barnett shale of North Texas was 153,000 boe/d, of which 27% was liquids.

The moves will help Devon meet a cost-cutting target of at least $780 million/year by 2021. Concentrating on US oil, Devon expects to achieve growth of 13-18% in 2019 with 10% less upstream capital than in 2018, self-funded at an oil price of $46/bbl if service and supply prices don’t increase.

The company’s core properties in the Delaware basin and Eagle Ford play of Texas, STACK play in Oklahoma, and Powder River basin of Wyoming produced an average 296,000 boe/d of oil and gas in the fourth quarter last year.

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