Devon Energy has signed agreements to divest its remaining non-core assets in the Midland Basin, Texas, to Pioneer Natural Resources and an undisclosed buyer for $858m.
Under the terms of the deals, the firm will sell its upstream assets in the southern Midland Basin and its undeveloped leasehold in Martin County, Texas.
Pioneer Natural Resources agreed to acquire about 28,000 acres from Devon for about $435m.
The acreage considered under the deal is located in Martin, Midland, Upton, Reagan, Glasscock, Andrews, Dawson, Gaines and Howard counties.
In a separate deal, Devon will sell its assets, which have production capacity of approximately 22,000 Boe per day, in the southern Midland Basin for $423m.
The agreements bring the company’s total non-core assets sale to $2.1bn. Recently, Devon signed a deal to divest assets worth nearly $1bn.
The divestments are part of the company’s efforts to sell $3bn worth of non-core assets in a bid to boost its balance sheet amid plunging oil price.
Devon Energy president and CEO Dave Hager said: "We are pleased to announce these highly accretive non-core divestitures, concluding our E&P sales process ahead of schedule.
"We anticipate our total non-core asset sales to be at or above the top end of our $2bn to $3bn guidance, with the sale of our 50% interest in the Access pipeline."
The firm plans to use at least two-thirds of asset sales proceeds to strengthen balance sheet while the remaining will be used for reinvestment in US resource plays.
Devon said it has increased its 2016 capital budget by $200m and plans to invest $1.1bn to $1.3bn this year. It also raised its 2016 production guidance for core operations to between 540,000 and 560,000 barrels of oil equivalent per day (boepd).
Hager added: "This additional activity will deliver production in early 2017 and beyond. Additionally, we are seeing even better than expected results from our core business and we are raising the mid-point of our full-year 2016 production guidance by 7,000 Boe per day."
Subject to customary closing conditions, the deals are scheduled to be completed during the third quarter of 2016.
Image: Devon Energy intends to divest upstream assets to strengthen its balance sheet. Photo: courtesy of Rosemary Ratcliff/ reeDigitalPhotos.net.