Devon Energy Corp. is selling its assets in the Tuscaloosa Marine Shale (TMS) and the Utica Shale, in an effort to raise new venture capital and focus on opportunities in the Permian Basin, Mississippian Lime and the Niobrara formation.

Devon spokesman Chip Minty told NGI the Oklahoma City-based producer believes the Permian, Mississippian and Niobrara are more lucrative plays and offer the best opportunities for large-scale development.

“You have to recognize that energy companies such as Devon can’t operate in every play,” Minty said Thursday. “We have to choose the plays that have the potential and the size necessary to compete for the capital within our company. Other companies have had success in the TMS and the Utica, and we think our acreage in these plays might be a better fit for them than they might be for Devon.”

Scotia Waterous (USA) Inc., the oil and natural gas unit of Scotiabank, has been hired by Devon as exclusive adviser to assist in the sales. The firm said Devon’s offering in the TMS includes about 297,000 net acres in Louisiana and Mississippi, nearly 95% of which is undeveloped, plus production of about 600 b/d. Eight wells have been drilled on the acreage being offered by Devon; six are producing and one is awaiting completion.

Meanwhile, in the Utica, Scotia Waterous said Devon is offering an average 79.7% working interest on about 244,000 gross (195,000 net) acres in eastern Ohio, in the liquids-prone portion of the play, with average royalty plus minor additional burdens of 13.2%. The offering also includes about 270 horizontal well permits issued by the Ohio Department of Natural Resources. The firm said the Utica acreage being offered by Devon is largely held by existing production. The offering excludes existing production.

Devon’s holdings in all five unconventional regions are part of a $2.2 billion joint venture (JV) with China Petrochemical Corp., also known as Sinopec (see NGI, Jan. 9, 2012). “We’ve said from the beginning that we didn’t expect to be working in all of those plays over a long period of time,” Minty said. “We said we would work and explore all five of them, and then we fully expected to narrow our focus on some of them.”

Wells Fargo Securities analyst David Tameron noted that Devon’s sales announcement “is not a surprise given management recent commentary about the play.” Tameron also noted that there was speculation Devon could also sell its noncore Canadian and offshore assets, or possibly engage in a corporate acquisition.

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