Devon Energy Corp. announced last Wednesday that its board of directors has approved a plan to form a publicly traded master limited partnership (MLP) that will own a minority interest in Devon’s U.S. onshore marketing and midstream business, including natural gas gathering and processing assets in Texas, Oklahoma, Wyoming and Montana.

Devon expects to file a registration statement for the planned MLP with the Securities and Exchange Commission (SEC) in the third quarter of 2007. An offering of partnership units in the MLP will follow registration with the SEC.

Devon’s stock price, which opened the day of the announcement at $79.41, rose as high as $83.92 in midmorning trading. Average trading volume for Devon is 3.3 million shares; last Wednesday volume surpassed the 4 million mark before noon.

A Devon subsidiary will serve as the general partner of the MLP, and Devon expects to own a majority of the partnership units following completion of the initial public offering. Following the offering, Devon will continue to own a majority interest in its domestic onshore marketing and midstream business.

Devon expects to utilize a significant portion of the proceeds from the sale of MLP units to retire debt of the parent company and to repurchase shares of its common stock. Any remaining proceeds would also be available to Devon for payment of dividends and other corporate purposes.

“The purpose of creating a master limited partnership is to allow the marketplace to more fully measure the performance and contribution of Devon’s marketing and midstream business while applying the proceeds in a manner beneficial to our stockholders,” said Devon CEO J. Larry Nichols.

Devon is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production and is included in the S&P 500 Index.

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