Devon Energy is dissolving a joint venture with BPX Energy. (Pictured): The Devon Energy Center tower in downtown Oklahoma City, Oklahoma. (Source: Shutterstock.com)
Two of South Texas’ top producers, Devon Energy and BPX Energy, agreed to dissolve their joint venture (JV) partnership in the Eagle Ford Shale.
The move ends a 15-year partnership originally structured by Petrohawk Energy and GeoSouthern Energy, two early pioneers in developing the Eagle Ford play.
The JV program inherited by Devon Energy and BPX, the U.S. shale segment for international supermajor BP Plc, covered the Eagle Ford’s Blackhawk Field.
The transaction is expected to close on April 1.
After closing, Devon will hold approximately 46,000 net acres in the Eagle Ford play, with greater than a 95% working interest and operatorship, the company said in its fourth-quarter earnings on Feb. 18.
Devon said dissolving the JV with BPX will gain “greater flexibility to allocate capital and anticipates material drilling and completion savings per well, significantly enhancing returns.”
Devon and BPX have both recently touted recompletion projects—or “refracs”—on their Eagle Ford assets.
BPX is seeing “triple-digit plus” returns from Eagle Ford refracs and EUR uplifts “we didn’t really predict in shale,” BP CEO Murray Auchincloss said during the company’s Feb. 11 earnings call.
Auchincloss called Eagle Ford refracs “the most interesting” space the company is watching across its U.S. shale footprint right now.
“The refracs and downspacing are actually creating more flow than the original motherbores,” he said.
The original JV was structured in 2010 between GeoSouthern and Petrohawk, two original trailblazers in drilling the horizontal Eagle Ford play.
Petrohawk was acquired by BHP Billiton in 2011 for $12.1 billion.
BP finally dove more heavily into U.S. shale in 2018 when it acquired BHP’s onshore assets for $10.5 billion.
And in 2014, Devon acquired GeoSouthern’s Eagle Ford assets for $6 billion in cash.
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