As part of the deal, Devon will contribute its equity interest in a newly formed Devon subsidiary, and $100m in cash, in exchange for a controlling interest in new general partner entity and master limited partnership.
The new midstream business includes gathering and transportation pipelines, and processing, fractionation and logistics assets in the Barnett shale, Permian basin, Cana and Arkoma Woodford, Eagle Ford, Haynesville, Gulf Coast, Utica and Marcellus regions of North America.
The new company is expected to hold around 7,300 miles of gathering and transportation pipelines, 13 processing plants, six fractionators, barge and rail terminals, product storage facilities, brine disposal wells and crude oil trucking fleet.
Devon Energy president and CEO John Richels said the combined company’s midstream assets are expected to accelerate the value proposition of Devon’s previously announced standalone master limited partnership.
"Additionally, this transaction provides Devon a market-based valuation for these assets on a go forward basis," Richels added.
