Devon Energy Corp.

Devon Energy Corp. (NYSE: DVN) has retained Scotia Waterous Inc. to sell the company’s assets in the Tuscaloosa Marine shale in northern Louisiana and southern Mississippi.

The sale represents Devon’s exit from the TMS, including all acreage associated with the previously-announced joint venture with China Petrochemical Corporation, Sinopec.

Devon has about 297,000 net acres, nearly 95% of which is undeveloped, within the TMS play. Current production is about 600 barrels of oil per day. The current production is 37 to 43° API oil, which receives Louisiana Light Sweet (“LLS”) pricing, currently about 15% higher than West Texas Intermediate, and a $2.50/Mcf premium for gas.
Leases in the play have an average net revenue interest of about 79%. About 80% of the leases have an option for a two-year extension with no depth restrictions or preferential rights.

The assets have eight wells drilled, including seven horizontals (six producing and one awaiting completion). Devon’s acreage position has been largely delineated, and resource volumes have been quantified. Devon is in the early stages of development of the play and has made considerable progress on cost reduction and well performance, with further optimization underway.

Devon expects one additional horizontal well, the Weyerhaeuser 72H, to be online in early February 2013. A virtual data room opened Feb. 1 and bids are due by March 13, 2013.