Oklahoma City-based independent Devon Energy Corp. is selling its oil and natural gas assets in Egypt and is terminating all of its operations there. The assets, which Devon obtained when it purchased Ocean Energy in 2003, will help the producer focus more of its exploration efforts in North America. The company’s production from Egypt is currently 5,000 boe/d, and the operations represent less than 1% of Devon’s company-wide production and proved reserves. No estimated sales price was disclosed. “Our decision to exit Egypt is primarily a matter of focus,” said Stephen J. Hadden, senior vice president, exploration and production. “Devon’s strategy continues to be to concentrate our resources in areas that can provide meaningful future growth in company-wide production and value. Although we have established a solid production base and hold a sizable suite of exploration opportunities in Egypt, we believe we can redeploy our resources from Egypt to projects in and outside North America that better fit our focused growth strategy. The sale process will be managed by Scotia Waterous. Data rooms for interested buyers will be opened in Houston and London in December. Acceptance of bids and completion of a purchase and sale agreement are expected in 1Q2007.
The Texas PetroIndex, an indicator of the economic vitality of the state’s oil and natural gas exploration and production industry, inched higher in September to a record 219.1, up 15% from the 190.4 reported in September 2005. The growth marks the state’s 49th consecutive month of improvement, but the Texas Alliance of Energy Producers (TAEP) noted the month-to-month increase of one tenth of 1% was the smallest in its sustained growth period. The PetroIndex is issued monthly by the TAEP, offering a composite number compiled from more than 20 oil and gas industry economic indicators, including prices, rig count, drilling permits issued, well completions, production volumes, production values and employment figures. The count of active drilling rigs in Texas during September averaged 787, a gain of 125 rigs compared with September 2005. Through the first nine months of this year, the active rig count in Texas averaged 733, about 34% higher than in the first eight months of 2005 and nearly three times the eight-month average in 1995, the base year. Through the first nine months, 14,668 drilling permits were issued, up from 12,556 for the same period of 2005. The natural gas spot price index in Texas during September averaged $6.25/Mcf, 7 cents lower than in August and 31% lower than in September 2005. Year-to-date through September, gas prices in the state declined to an average of $6.49/Mcf, compared with $6.59 between January and August 2005. To review the PetroIndex, visit www.texasalliance.org and click on “PetroIndex.”
Calgary-based EnCana Corp. and its affiliate have closed the second and final phase of the previously announced sale of their gas storage business interests to the Carlyle/Riverstone Global Energy and Power Fund, an energy private equity fund managed by Riverstone Holdings LLC and The Carlyle Group. The second phase of the transaction involved closing of the sale of the Wild Goose storage facility interests in California for proceeds of approximately US$200 million. The California Public Utilities Commission has approved the sale of the Wild Goose storage facility. The initial phase of the sale, which closed in May, included EnCana’s Alberta, Oklahoma and Louisiana storage assets, which generated proceeds of approximately $1.3 billion.
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