US oil and gas producer Devon Energy has signed agreements to divest its non-core upstream assets in Texas and Oklahoma and a royalty interest in the northern Midland Basin to undisclosed parties for approximately $1bn.
Devon Energy agreed to sell Texas upstream assets, which averaged net production of 22,000 oil-equivalent barrels (Boe) per day in the first quarter of 2016, for $525m.
According to company estimates, these assets had proved reserves of approximately 87 million Boe as of 31 December 2015.
The company will also sell its non-core position in the Anadarko Basin’s Granite Wash area for $310m. The assets had average net production capacity of 14,000 Boe per day in the first quarter of 2016.
Additionally, Devon will sell overriding royalty interest across 11,000 net acres for $139m.
The firm said the overriding royalty interest’s current production is approximately 1,000 Boe per day.
This transaction, however, excludes the company’s stake across 15,000 net acres in Martin County, Texas that is being marketed separately.
Devon Energy president and CEO Dave Hager said: "Combined with other recent asset sales, we have now announced $1.3bn of gas-focused upstream divestitures.
The company plans to use the proceeds from the tax-efficient transactions to further boost its investment-grade financial position.
Hager added: "With oil prices having moved in our favor throughout the sales process, we are encouraged by the interest and progress in marketing our remaining non-core oil assets in the Midland Basin and Access Pipeline in Canada.
"Proceeds for the entire divestiture program are well on their way to achieving our previously announced range of $2bn to $3bn in 2016."
Subject to customary terms and conditions, the deals are planned to be completed in the third quarter of 2016.
Additionally, Devon is considering divestment of 50% stake in the Access Pipeline in Canada.
Image: Oil and gas producer Devon plans to improve its finances by divesting its assets. Photo: courtesy of suwatpo/ FreeDigitalPhotos.net.