US based oil and natural gas firm White Star Petroleum has signed an agreement with Devon Energy to acquire its non-core Mississippi Lime and Woodford Shale assets in the US for $200m.
The assets considered for the acquisition include about 210,000 largely contiguous net acres primarily located in Payne, Lincoln, Logan and Garfield Counties in Oklahoma.
The sale is part of Devon Energy’s plans to divest $2bn to $3bn of non-core assets across its portfolio during 2016.
Devon Energy president and CEO Dave Hager said: "Proceeds will be used to further strengthen our investment-grade balance sheet. Additionally, this timely transaction accelerates Devon’s efforts to focus exclusively on its best-in-class resource plays in onshore North America."
During the first quarter of 2016, net production from the assets averaged 12,800 oil-equivalent barrels (boe) per day.
Proved reserves associated with these properties stood at 11 million (boe).as of 31 December 2015. .
White Star Petroleum CEO Elliot Chambers said: "With the acquisition of Devon’s Mississippi Lime and Woodford Shale assets, White Star has doubled its production and acreage footprint in Central Northern Oklahoma.
"This acquisition will be significantly accretive to production, liquidity, reserves, and leverage metrics, and will allow White Star to continue to leverage our core competency in low-cost Mississippian and Woodford resource development."
Subject to customary terms and conditions, the transaction is planned to be completed in the second quarter of 2016.
Devon said it is marketing its 50% interest in the Access Pipeline in Canada, and efforts are in progress to monetize remaining upstream assets in the US.