After going on an acquisition binge over the past couple of years, Oklahoma City, OK-based Devon Energy Corp. has switched gears and plans to shed up to $1.5 billion in properties in North America and overseas to reduce its ballooning debt by mid-2002.

Devon Energy, ranked as one of the top three U.S. independent oil and gas producers, already has opened data rooms at its international office in Houston, TX, for prospective buyers to view information about its Canadian and Argentina assets that are up for sale, said company spokesman Michael Barrett. It plans to open similar data rooms in January for Devon Energy’s U.S. Permian Basin, Rocky Mountain and Gulf Coast properties, as well as its Indonesian assets, he noted.

“We’re in the process of going through the selling right now,” Barrett told NGI, adding that the company expects to complete most of the property sales by the middle of next year. He declined to identify the assets that Devon Energy has targeted for sale but said they account for about $275 million of the company’s existing $2 billion in reserves, which include the reserves of recently acquired Canadian producer Anderson Exploration Ltd. and soon-to-be-acquired Mitchell Energy & Development Corp.

The company’s goal is to streamline its debt load. “We took on a significant amount of debt [more than $8 billion] with the purchase of Mitchell Energy and Anderson Exploration,” Barrett said. Devon Energy acquired Anderson Exploration for an estimated $4.6 billion in mid-October, and plans to close on its $3.1 billion purchase of Mitchell Energy in late January. Over the years, Devon also has picked up Canada’s Northstar Energy Corp., PennzEnergy Co. in Houston, and Santa Fe Synder.

“Our debt asset ratio now is over 60%. We want to bring that down,” Barrett noted.

The producer’s move is mostly in response to the ongoing fall in oil and natural gas prices. It has nothing to do with Wall Street’s desire to see more conservative balance sheets from companies in the wake of the financial collapse of Enron Corp., according to Barrett. “We had no hedges with Enron whatsoever,” so Devon Energy’s exposure to the bankrupt energy trader was “minimal.”

Even after its properties are sold, Barrett says Devon Energy still will be among the top independent producers in the country, along with Anadarko Petroleum and Burlington Resources.

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