Devon Energy Announces $1.3 Billion Agreement with Maersk Oil in First of Planned Gulf of Mexico and International Divestitures
OKLAHOMA CITY, Dec 22, 2009 /PRNewswire-FirstCall via COMTEX/ -- Devon Energy Corporation (NYSE: DVN) today announced it has agreed to sell its interests in three Lower Tertiary development projects in the Gulf of Mexico to Maersk Oil for $1.3 billion. The agreement covers Devon's 50-percent working interest in the Cascade project and its 25-percent working interests in the Jack and St. Malo projects. All three projects are located in the deepwater Walker Ridge federal lease area offshore Louisiana.
"This is an important first step in executing our plan to divest all of our Gulf of Mexico and international assets and to reposition Devon as a purely North American onshore company," said John Richels, Devon's President. "We intend to apply the sales proceeds to debt reduction and to accelerate investment in our world-class North American onshore assets."
Devon has no current production or proved reserves associated with these projects. The sale of these properties reduces Devon's previously announced 2010 capital budget for the Gulf of Mexico by approximately $400 million.
Devon estimates its after-tax proceeds from this transaction at approximately $1.1 billion. The effective date of the sale is January 1, 2010. Closing is expected to occur on or before February 1, 2010. Completion of the transaction is subject to preferential rights to purchase held by the other working interest owners in the properties as well as additional closing conditions and regulatory approvals.
Devon announced plans to divest its Gulf of Mexico and international assets in November 2009. Data rooms for all of the remaining divestiture assets will be open in the first quarter of 2010. The company has estimated the aggregate after-tax proceeds from the planned divestitures, including this transaction, at $4.5 billion to $7.5 billion.
Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production. Devon is a leading U.S.-based independent oil and gas producer and is included in the S&P 500 Index. For additional information, visit www.devonenergy.com.
This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements are those concerning strategic plans, expectations and objectives for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. This release may contain certain terms, such as resource potential, reserve potential, probable reserves, possible reserves and exploration target size. The SEC guidelines strictly prohibit us from including these terms in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K, File No. 001-32318, available from us at Devon Energy Corporation, Attn. Investor Relations, 20 North Broadway, Oklahoma City, OK 73102. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
SOURCE Devon Energy Corporation