2010-03-11-2010-03-11-2010-04-30

Acquired interests in the deepwater Gulf of Mexico, Brazil and Azerbaijan.

British major BP Plc (NYSE: BP) plans to acquire all of the interests in the deepwater Gulf of Mexico, Brazil and Azerbaijan from Oklahoma City-based producer Devon Energy Corp. (NYSE: DVN) for $7 billion in cash as Devon nears the end of its repositioning to onshore North America assets.

BP group chief executive Tony Hayward says, "This strategic opportunity fits well with BP's operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil. As well as giving us a broad portfolio of assets in the exciting Brazilian deepwater, it will strengthen our position in the Gulf of Mexico, enhance our interests in Azerbaijan and enable us to progress the development of Canadian assets."

As of year-end 2009, Devon's Gulf of Mexico assets had proved reserves of 20 million barrels of liquids and 198 billion cubic feet of gas (37% proved developed). Producing fields include Nansen, Magnolia, Sturgis and Merganser as well as a 30% interest in the Kaskida discovery, giving BP a 100% interest. Devon also holds interests in approximately 240 deepwater leases with a focus on the emerging Paleogene play in the ultra deepwater.

BP will assume Devon's leases of the Seadrill West Sirius and Transocean rigs valued at approximately $1.1 billion.

In Brazil as of year-end 2008, Devon held interests in 3.1 million acres in 12 licensed blocks, largely in the offshore Campos, Barreirinhas and Camamu-Almada basins. The Campos basin blocks include three discoveries, Xerelete, pre-salt Wahoo and Itaipu, and the producing Polvo Field. Two onshore licenses are in the Parnaiba Basin. Proved reserves were reported as 4 million barrels of oil equivalent.

Andy Inglis, BP chief executive of exploration and production, says, "Through our entry into Brazil, BP will add a major position in another attractive deepwater basin. Together with the additional new access in the Gulf of Mexico, it further underlines our global position as the leading deepwater international oil company."

In Azerbaijan as of year-end 2008, Devon held a 5.6% interest in 107,000 acres in the offshore Azeri-Chirag-Gunashli (ACG) oil fields in the Caspian Sea. Proved reserves were 84.7 million barrels of oil equivalent. The deal will increase BP's operating interest in the fields to 39.7%.

Devon chairman and chief executive Larry Nichols says, "These sales, combined with our previously announced divestitures of $1.3 billion of deepwater Gulf of Mexico assets, put Devon well on the way to completing its strategic repositioning."

Closing is expected by year end. Proceeds will be used to accelerate development of Devon's North American onshore properties and for debt reduction.

Analysts at Tudor, Pickering, Holt & Co. Securities Inc. estimate BP paid $2.3 billion for the Gulf of Mexico assets, $2.3 billion for Brazil and $2 billion for Azerbaijan. Estimating a purchase price of $1.3 billion for Gulf of Mexico proved reserves, the analysts value that portion of the deal at $22 per proved barrel of oil equivalent.