OKLAHOMA CITY, Sep 16, 2010 (BUSINESS WIRE) --
Devon Energy Corporation (NYSE:DVN) today announced that its Board of
Directors sanctioned the company's third development project on its
Jackfish oil sands leases in Alberta, Canada. Pending approval of the
regulatory application filed last month, Devon expects to begin
facilities construction at Jackfish 3 near year-end 2011, with plant
startup targeted for 2015.
Once fully operational, Jackfish 3 is expected to produce an average of
35,000 barrels of oil per day before royalties. Like Jackfish 1 & 2, the
third phase represents an estimated 300 million barrels of recoverable
oil before royalties. Devon expects to deploy $1.2 billion of capital on
Jackfish 3 through startup.
"We are pleased to initiate our third phase of Jackfish," said John
Richels, Devon's president and chief executive officer. "Devon's oil
sands projects provide visible, low-risk oil production growth through
the end of the decade while serving as a natural hedge to North American
natural gas."
All three phases of Jackfish employ Steam-Assisted Gravity Drainage
(SAGD) technology. Devon's SAGD projects burn natural gas to produce
steam that is injected into the reservoir. The steam heats the oil
thereby reducing its viscosity and enabling it to flow to the surface.
In total, the three phases of Jackfish represent approximately 900
million barrels of gross estimated recoverable reserves and more than
100,000 barrels per day of oil production before royalties. Devon has a
100 percent working interest in each of the three Jackfish projects.
Devon is currently continuing full-scale operations at its original
Jackfish project, which began operating in 2007. Jackfish is among the
best performing of the major SAGD projects in the industry with high per
well production rates, a low steam-oil-ratio and industry-leading
operating costs. These results reflect the efficiency of the project and
the high reservoir quality in the Jackfish area.
Construction of the company's Jackfish 2 project is now roughly 85
percent complete. Devon expects capital expenditures through startup to
approximate $1 billion. Jackfish 2 remains on schedule for startup in
late 2011.
To further leverage the company's SAGD expertise, earlier this year
Devon announced a joint-venture with BP in which it acquired 50 percent
of BP's interest in the Kirby-Pike oil sands leases. These leases are
immediately adjacent to Jackfish and are believed to be of similar
quality. Devon will conduct additional delineation drilling and 3D
seismic acquisition work on the Kirby-Pike acreage beginning in the
fourth quarter of 2010. Ultimately, Devon will develop this acreage
through multiple phases similar to Jackfish. Devon expects its
Kirby-Pike and Jackfish projects to drive its thermal oil production to
between 150,000 and 175,000 barrels per day by 2020, net of royalties.
This represents a 17 to 19 percent compound annual growth rate.
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. These risks include, but
are not limited to the volatility of oil, natural gas and NGL prices;
political, economic or public policy changes; uncertainties inherent in
estimating oil, natural gas and NGL reserves; drilling risks; and
environmental risks. 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.
Effective January 1, 2010, the United States Securities and Exchange
Commission permits oil and gas companies, in their filings with the SEC,
to disclose only proved, probable and possible reserves that meet the
SEC's definitions for such terms, and price and cost sensitivities for
such reserves, and prohibits disclosure of resources that do not
constitute such reserves. This release may contain certain terms, such
as resource potential and exploration target size. These estimates are
by their nature more speculative than estimates of proved, probable and
possible reserves and accordingly are subject to substantially greater
risk of being actually realized. The SEC guidelines strictly prohibit us
from including these estimates in filings with the SEC. U.S. investors
are urged to consider closely the disclosure in our Form 10-K for the
fiscal year ended December 31, 2009, 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 or from the SEC's website at www.sec.gov.
SOURCE: Devon Energy Corporation
Devon Energy Corporation
Investor Contact
Shea Snyder, 405-552-4782
or
Media Contact
Chip Minty, 405-228-8647