Devon announces divestment, Q1 results
USA
OKLAHOMA CITY, May 3, 2017 – Devon Energy plans to sell off USD 1 billion worth of assets, according to a statement released by the company on Tuesday.
The Oklahoma-based independent said most of the properties to be divested are located in the USA and include holdings in the Barnett Shale of north Texas. The company wants to use the proceeds to strengthen its financial position and appeal to investors, as well as develop core assets in high-margin regions. It expects the divestiture programme to be completed in the next 12 to 18 months.
Devon intends to devote resources to drilling its assets in the prolific Delaware Basin of west Texas and New Mexico and the Sooner Trend Anadarko Basin Canadian and Kingfisher Counties (STACK) play in Oklahoma, where it has more than 30,000 potential drilling locations.
In making the divestiture announcement, Devon Energy president and CEO Dave Hager said the potential of these plays led the company to refocus its resources.
“The successful resource expansion in our world-class STACK and Delaware Basin assets has generated an abundance of opportunities within our portfolio,” commented Hager. “Given the multi-decade growth platform these franchise assets provide, we are taking this initial step to bring value forward from non-core assets and sharpen our focus on the highest-returning growth inventory in our portfolio.”
Indeed, these plays are already starting to make their mark on Devon’s books. The company released its first-quarter results on Tuesday as well, showing improvement in production and income.
Oil production averaged 261,000 bopd for the period, up some 7% from the final quarter of 2016. Most of the growth came from the company’s US resources, where oil production increased 17% over the previous quarter. Devon pointed to recent completions in the Eagle Ford and STACK plays as drivers for this uptick in production.
All this helped the company record net earnings of USD 565 million in the first quarter of the year.
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