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Devon agrees to sell Eagle Ford assets to Crescent for 4.2 billion dollars

Devon Energy signed an agreement to sell its Eagle Ford assets in Texas to Crescent Energy for 4.2 billion dollars in cash. The assets represent about 4% of Devon’s production. Management plans to use after-tax proceeds for share repurchases and debt reduction. Completion is expected around year-end, subject to regulatory approvals and the agreement’s closing conditions.

Economics & Markets··Morning
An oil pumpjack and production tank in flat scrubland

Crescent agrees to buy Devon’s Texas assets

Devon Energy, a US oil and natural gas producer, agreed to sell its Eagle Ford assets to Crescent Energy for 4.2 billion dollars in cash. The companies announced the agreement on October 8. The price remains subject to customary closing adjustments.[1], [2]

The assets are in Karnes, DeWitt and Gonzales counties in Texas and represent around 4% of Devon’s total production, measured in barrels of oil equivalent. The agreement assigns an economic effective date of July 1. Ownership transfer is subject to completion of the transaction.[1]

Sale proceeds are earmarked for buybacks and debt

Chief executive Clay Gaspar described the sale as part of Devon’s continuing portfolio review. Management expects the disposal of mature assets to lengthen remaining inventory life, reduce the company’s breakeven and lower its base production decline rate. Devon plans to direct after-tax proceeds toward faster share repurchases and debt reduction.[1]

Regulatory approval comes before completion

Devon expects closing around year-end, subject to regulatory approvals and customary conditions. It plans more information on the effect on its outlook with third-quarter results. Earlier portfolio steps included the combination with Coterra, additions to Delaware Basin inventory and investment in the Solitude pipeline linking gas production to market. RBC Richardson Barr is financial adviser and Kirkland & Ellis is legal adviser.[1]

References

  1. News sourceDevon EnergyDevon agrees to sell Eagle Ford assets for $4.2 billion↩1↩2↩3↩4
  2. News sourceHouston ChronicleDevon Energy agrees to sell Eagle Ford assets to Crescent↩
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