Devon Energy Corp. confirmed Monday that Maersk Oil’s plan to buy the Oklahoma City-based producer’s stakes in promising deepwater Gulf of Mexico (GOM) discoveries was blocked after some of the other lease owners used their preferential purchase rights.

Devon spokesman Chip Minty told NGI that because of confidentiality agreements he could not provide specific details, but he said initial reports about the scuttled transaction were true. Maersk in December agreed to pay Devon $1.3 billion for interests in three deepwater projects in the Lower Tertiary Trend: Cascade, Jack and St. Malo (see Daily GPI, Dec. 23, 2009). Maersk also negotiated to make up to $4 billion in additional investments in the GOM projects over time.

However, Devon’s partners in the Cascade and St. Malo discoveries exercised their option to purchase Devon’s stake, Minty said. Devon apparently would receive about the same amount from the partners for the interests in the projects that it would have received from Maersk. Devon continues to negotiate with Maersk about the Jack prospect and other assets in the GOM.

Devon’s half-interest in the Cascade deepwater project is to be bought by 50% owner Petroleo Brasilerio (Petrobras) of Brazil, which operates the block. Cascade is scheduled to begin operations this year. The sale also was to include a quarter-interest in the Chevron Corp.-operated Jack and St. Malo projects, which are both scheduled to begin production in 2014. Eni SpA, ExxonMobil Corp., Statoil ASA and Petrobras also own stakes in the St. Malo discovery.

Besides Petrobras, none of the other partners would confirm whether they were involved in taking over Devon’s stakes. Devon’s estimated share of recoverable resources from the three fields combined is more than 200 million boe.

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