Devon to sell Permian assets for $215M

Devon Energy Corp. will sell 9,600 acres of noncore properties in the Permian Basin for $215 million, the company announced Tuesday.

Houston-based Carrizo Oil and Gas agreed to buy the assets in southwest Texas’ Ward and Reeves counties. The properties are producing about 2,500 barrels of oil equivalent per day, including 60 percent oil, Devon said.

The properties are in the Delaware Basin, which is the western portion of the Permian, the country’s most active oil field. The deal is scheduled to close in the fourth quarter.

Most of Devon’s drilling activity is in its core areas of the Delaware Basin and northwest Oklahoma’s STACK play, but Devon executives have said they will sell noncore assets throughout the company’s operating footprint.

Tuesday’s deal boosts Devon’s asset sales program to $4.4 billion this year, including the $3.125 billion sale of the company’s stake in EnLink Midstream.

Devon executives earlier this month said they expected to sell up to another $1 billion in noncore assets by the end of the year.

“We look at a lot of different things when we look at what may or may not remain in the inventory,” CEO Dave Hager said Aug. 1 on a conference call with analysts. “We look at what is our overall depth of our development inventory, what’s the intrinsic value of the asset that we may be looking to monetize and what is its production and cash flow contributions.

“We look at what are the prevailing market conditions out there, and we have teams that are very engaged and understand the market from both a buy and a sell standpoint extremely well.”