Devon Energy Corporation has acquired oil and gas properties in the Iron River area of western Canada from ExxonMobil Canada Energy for a purchase price of $200 million.
The Alberta located acquisition includes 208 net sections of heavy oil leases and 51 net sections of conventional oil and gas leases. These leases encompass approximately 165,000 net acres with an average working interest of approximately 96%.
Iron River is immediately adjacent to Devon’s Manatokan field, which produces 7,000 barrels of oil per day from about 300 wells. Devon believes the newly acquired assets can deliver a similar performance to Manatokan, which is predicted to add approximately 700,000 barrels the company’s 2005 production levels.
We pursued this acquisition because of Iron River’s similarities to our Manatokan field and the success we have enjoyed there, commented Stephen Hadden, Devon’s senior vice president, exploration and production. It represents several years of low risk drilling; including 70 locations that are drill-ready today…we plan to have four or five rigs running at Iron River in the third quarter of 2005.
In the longer term, the Devon anticipates drilling in excess of 800 wells on the Iron River property over the next four years. This increase is expected boost the company’s production from its current level of less than 3,000 barrels of oil per day to approximately 30,000 barrels per day by 2010.