Devon Energy Corp. (NYSE: DVN) announced today it has entered into a definitive agreement to sell the southern portion of its Barnett Shale position for $553 million. The transaction is subject to customary terms and conditions and is expected to close in the second quarter of 2018.
“Combined with other recent asset sales, divestiture proceeds associated with our 2020 Vision have now reached $1.0 billion,” said Dave Hager, president and CEO. “In conjunction with this asset sale, and consistent with our strategic plan, we announced today in a separate release that our board has authorized a $1.0 billion share-repurchase program and a 33 percent increase in Devon’s quarterly cash dividend. We are very confident about Devon’s future and, as market conditions permit, we will continue to pursue opportunities to further increase cash returns to our shareholders.”
Net production from the southern Barnett divestiture assets, which reside primarily in Johnson County, are currently averaging 200 million cubic feet of gas-equivalent per day. Field-level cash flow accompanying these assets, which excludes overhead costs, is expected to be approximately $100 million in 2018.
The company’s remaining position in the Barnett Shale primarily resides in Denton, Wise and Tarrant counties, with current production of 680 million cubic feet of gas-equivalent per day. This position contains an inventory of approximately 1,500 potential locations, consisting of undrilled inventory and horizontal refrac opportunities.
J.P. Morgan Securities LLC acted as the financial advisor to Devon on the transaction. Vinson & Elkins LLP acted as legal advisor to Devon.