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Was Devon’s Non-Core Asset Divestiture Program Successful?

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Devon Energy’s successful non-core assets divestiture program

In July 2016, Devon Energy concluded its 2016 non-core assets divestiture program. It sold its non-core upstream assets for proceeds totaling $3.2 billion, surpassing the top end of its $2 billion–$3 billion guidance range.

Devon Energy’s divested assets include:

  • Its Mississippian assets sold for ~$200 million in April 2016. These assets were producing ~12.8 Mboe per day.
  • Its East Texas upstream assets sold for ~$525 million in June 2016. These assets were producing ~22 Mboe per day.
  • Its Anadarko Basin’s Granite Wash area assets sold for $310 million in June 2016. These assets were producing ~14 Mboe per day.
  • Its Northern Midland Basin royalty interest sold its overriding royalty interest across 11,000 net acres for ~$139 million. Production from this overriding royalty interest was ~1 Mboe per day.
  • Its Midland Basin assets sold for ~$858 million in June 2016. These assets were producing ~23 Mboe per day.
  • The company sold its 50% ownership interest in Access Pipeline for $1.1 billion in July 2016.

Devon Energy plans to use at least two-thirds of these asset sales proceeds to reduce debt and one-third to accelerate investment in its best-in-class US resource plays, led by the STACK and Delaware Basin.

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Other upstream players

In order to deal with lower energy prices and raise cash, other S&P 500 (SPY) and S&P Midcap 400 (MDY) upstream players like Murphy Oil (MUR), Chesapeake Energy (CHK), and CONSOL Energy (CNX) have also recently completed divestitures.

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