Devon Completes $330 Million Midstream Divestiture Program
Devon Energy Corp. said last week that it has completed its three year program to divest non-core midstream assets. The program, which began in 2002, involved nine separate transactions.
The Oklahoma City-based independent also announced that the final transaction, which is under contract, is expected to close by mid-year 2005. Devon noted that aggregate proceeds from these transactions are approximately $330 million.
"Devon's midstream operations continue to perform exceptionally well," said Darryl G. Smette, senior vice president of marketing and midstream. "These divestitures, which are in addition to the divestitures of producing oil and gas properties we announced in September, have allowed us to bring increased focus to our core midstream assets."
Devon's divested midstream assets include six gas processing plants and approximately 7,000 miles of gas gathering pipelines in Oklahoma, Texas, Louisiana, Kansas and Wyoming. The company added that the midstream assets sold in 2004 and expected to be sold in 2005 contributed approximately $48 million to Devon's marketing and midstream operating margin in 2004.
Following the divestitures, the company will still have ownership in 64 gas processing plants in the United States and Canada with aggregate net processing capacity of nearly 2.1 Bcf/d of natural gas. The company also owns an interest in 11,320 miles of gas gathering pipelines.
In late Sept. 2004, Devon reported its plans to divest oil and gas properties in North America representing proved reserves of 145 to 165 million Boe (see NGI, Oct. 4, 2004). Company-wide proved reserves stood at approximately 2.1 billion Boe at the end of 2003. In that announcement, Devon said it believed that it was an ideal time to "refocus our producing portfolio."
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