Devon Energy Corp. is selling almost $1 billion of natural gas-weighted upstream assets in East Texas, the Permian Basin's Midland sub-basin and in the Anadarko Basin's Granite Wash formation, which together produce about 37,000 boe/d.

The largest of the sales, all with undisclosed parties, is a $525 million transaction to sell upstream properties in East Texas. The Granite Wash properties in the Anadarko are being sold for $310 million, and the northern Midland sub-basin properties are being divested for $139 million. All the sales are expected to be completed by the end of September.

"Combined with other recent asset sales, we have now announced $1.3 billion of gas-focused upstream divestitures," CEO Dave Hager said. "As we've said previously, proceeds from these tax-efficient transactions will be utilized to further strengthen our investment-grade financial position.

"With oil prices having moved in our favor throughout the sales process, we are encouraged by the interest and progress in marketing our remaining non-core oil assets in the Midland Basin and Access Pipeline in Canada," a sales process that has been underway for months (see Shale DailyFeb. 17).

Devon's No. 1 priority this year is to protect the balance sheet, Hager said earlier this year. Proceeds for the latest divestiture program "are well on their way to achieving our previously announced range of $2 billion to $3 billion in 2016," he added.

Net production from these properties being sold in East Texas averaged 22,000 boe/d in the first quarter, 95% weighted to natural gas. Field-level cash flow accompanying these assets, which excludes overhead costs, totaled $10 million in 1Q2016. At the end of 2015, proved reserves amounted to about 87 million boe.

The Granite Wash transaction includes net production that averaged 14,000 boe/d between January and March, 87% weighted to gas, with field-level cash flow excluding overhead costs totaling $6 million. Proved reserves associated with these properties totaled 31 million boe at the end of last year.

In the northern Midland Basin, Devon has an agreement to sell its overriding royalty interest across 11,000 net acres with current production from the interest of 1,000 boe/d. The transaction does not include the company’s working interest across 15,000 net acres in Martin County, TX, which is being marketed separately. Production associated with the other upstream assets for sale in the Midland averaged 25,000 boe/d in the first quarter.

Devon is in "advanced negotiations" to sell its half-stake in the Access Pipeline in Canada. An announcement is expected within the next several weeks, the Oklahoma City operator said. The oil pipeline transports heavy oil from Canada oilsands, where Devon has some projects. The producer also is seeking a 25-year transportation agreement with the Access Pipeline sale.