U.S.-based energy company Devon Energy Corp (NYSE: DVN) said Wednesday it reached an agreement to sell its Canadian business for C$3.8 billion ($2.8 billion USD) to Canadian Natural Resources Ltd (NYSE: CNQ).
Devon Energy's Canadian business includes heavy oil assets mostly located in Alberta with net production averaging 113,000 oil-equivalent barrels in the first quarter of 2019. As of the end of 2018, the Canadian business had a proven reserve of 409 million barrels of oil. Field-level cash flow accompanying the assets totaled $236 million in 2018.
Why It's Important
Devon Energy CEO Dave Hager said the asset sale is consistent with the company's transformation to become a U.S.-focused oil growth business. The "clean and timely exit" from Canada will generate value for shareholders as it accelerates efforts to "focus exclusively on our high-return U.S. oil portfolio."
"With this change in ownership, it is great to see our talented and innovative employee base transition to a top-tier company like Canadian Natural Resources," the CEO said in the press release.
Devon also said the process of divesting its Barnett Shale gas assets in Texas remains ongoing with expectations to divest the assets by the end of the year. This move would "complete the company's transformation."
Canadian Natural Resources' stock was trading lower by 2.7 percent at $25.55 per share Wednesday morning.
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