Devon Energy Corp. (NYSE: DVN) said Dec. 7 it will buy some assets in the Anadarko Basin from Felix Energy LLC for $1.9 billion, the latest deal in the U.S. oil patch amid a global crude price rout.
As part of the deal with Felix, Devon will acquire 80,000 net acres, with up to 10 prospective zones, in the Anadarko Basin which is spread over Oklahoma and Texas.
Separately, Devon agreed to acquire 253,000 net acres in the Powder River Basin for $600 million.
The Powder River Basin assets are located to the south of Devon's existing position in Wyoming and includes production of 7,000 barrels of oil equivalent per day (boe/d), with about 85% oil, the company said.
Devon's pipeline unit EnLink Midstream LLC (NYSE: ENLC) also agreed to acquire peer Tall Oak Midstream for $1.55 billion.
Reuters reported last week that Devon is in discussions to buy peer Felix Energy for around $2 billion, including debt, citing sources familiar with the matter.
The deals will be funded with about $1.35 billion of Devon equity issued to sellers and about $1.15 billion of cash on hand and borrowings.
Divestitures
Devon said it is also in the process of marketing its Access Pipeline in Canada and planning to monetize various other non-core upstream assets.
The company has identified 50,000 to 80,000 boe/d of production from non-core assets, which it plans to divest throughout 2016.
A more than 60% drop in oil prices, has forced oil producers, including Oklahoma-based Devon, to tighten their budgets and raise cash.
Devon, which wrote down about $6 billion worth of oil and gas assets in the third quarter, said it expects pipeline and upstream divestitures to generate proceeds of $2 billion to $3 billion.
Morgan Stanley & Co LLC was the financial adviser to Devon for the Felix deal. Tudor Pickering Holt & Co was Felix's financial adviser.
Up to close on Dec. 4 of $40.53, Devon's stock had declined nearly 34% this year.
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