Devon Energy Corp. (DVN) announced that it has agreed to sell its interests in three Lower Tertiary development projects in the Gulf of Mexico to Maersk Oil for $1.3 billion. The agreement covers Devon's 50% working interest in the Cascade project and its 25% working interests in the Jack and St. Malo projects. All three projects are located in the deepwater Walker Ridge federal lease area offshore Louisiana.
Devon said that it has no current production or proved reserves associated with these projects. The sale of these properties reduces Devon's previously announced 2010 capital budget for the Gulf of Mexico by about $400 million.
Devon estimates its after-tax proceeds from this transaction at about $1.1 billion. The effective date of the sale is January 1, 2010. Closing is expected to occur on or before February 1, 2010.
Devon announced plans to divest its Gulf of Mexico and international assets in November 2009. Data rooms for all of the remaining divestiture assets will be open in the first quarter of 2010. The company has estimated the aggregate after-tax proceeds from the planned divestitures, including this transaction, at $4.5 billion to $7.5 billion.
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