OKLAHOMA CITY--(BUSINESS WIRE)--Aug. 1, 2012--
Devon Energy Corporation (NYSE:DVN) today announced it has signed an
agreement with Sumitomo Corporation whereby Sumitomo will invest $1.4
billion in exchange for 30 percent of Devon’s interest in approximately
650,000 net acres in the Cline Shale and the Midland-Wolfcamp Shale.
“This transaction once again demonstrates the value embedded in our
high-quality portfolio,” said
John Richels
, Devon’s president and chief
executive officer. “This arrangement will materially enhance Devon’s
future returns and improve our capital efficiency. It will also further
enhance our financial strength. For quite some time we have had a strong
working relationship with Sumitomo and look forward to a mutually
beneficial joint venture.”
Under the terms of the agreement, Sumitomo will invest $340 million in
cash upon closing and an additional $1.025 billion will be invested in
the form of a drilling carry. The drilling carry will fund 70 percent of
Devon’s capital requirements, resulting in Sumitomo paying 79 percent of
the overall drilling and completion costs during the carry period. For
the full-year 2012, the partnership expects to drill approximately 40
gross wells. Based on the current work plan, Devon expects the entire
$1.025 billion carry to be realized by mid-2014.
Devon will serve as operator and is responsible for commercially
marketing all production from these plays into the North American
market. The effective date of this transaction is January 1, 2012.
Closing of the transaction is expected to occur in the third quarter of
2012.
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.
Source: Devon Energy Corporation
Devon Energy Corporation
Investor Contacts
Shea Snyder,
405-552-4782
or
Scott Coody, 405-552-4735
or
Media
Contact
Chip Minty, 405-228-8647