Devon Energy Corp. (NYSE: DVN) announced today it has entered into a definitive agreement to monetize its Lavaca County assets in the Eagle Ford play. Combined with other minor asset sales completed across its U.S. operations, proceeds from the company’s recently announced $1 billion divestiture program have now reached $340 million. The Lavaca County transaction is subject to customary terms and conditions and is expected to close by the end of 2017.
“These highly-accretive asset sales are an important step in executing on our $1 billion divestiture program over the next year,” said Dave Hager, president and CEO. “The divestiture proceeds will further strengthen our investment-grade financial position and provide us additional flexibility to build operational momentum across our top-tier U.S. resource plays.”
In aggregate, net production from the divested properties averaged approximately 4,000 oil-equivalent barrels (Boe) per day (60 percent oil). Field-level cash flow accompanying these assets, which excludes overhead costs, is projected to approximate $30 million annually. Proved reserves associated with these properties amounted to less than 10 million Boe at Dec. 31, 2016. The company expects to incur minimal taxes associated with these transactions.
Efforts to monetize Devon’s Johnson County properties in the Barnett Shale are progressing. The Johnson County assets represent approximately 20 percent of the company’s Barnett Shale net production and cash flow. Devon is actively marketing these assets and expects to complete its non-core divestiture program over the next year.
RBC Richardson Barr acted as a financial advisor to Devon on the Lavaca County transaction.