Devon Energy to Sell Canadian Business for $2.79 Billion

Devon Energy (DVN) signed a definitive deal to sell its Canadian business, housed under its Devon Canada unit, to Canadian Natural Resources (CNQ) for CAD3.78 billion ($2.79 billion), the companies said in separate statements issued early Wednesday.

The Devon Canada assets have a total production capacity of 128,300 barrels of oil per day and aggregate proved reserves of 730 million barrels of oil. According to Canadian Natural Resources, the acquisition of Devon Canada will yield CAD135 million in annual synergies from facility consolidation and other operating efficiencies.

Canadian Natural Resources said it negotiated a new CAD3.25 billion committed term facility to fund the acquisition, which is expected to close June 27.

Devon Energy said the sale was a vital step in its “transformation” to become a US oil growth business. The company plans to use the proceeds to cut debt and said it continues to advance the sale of its Barnett Shale gas assets in north Texas. Devon Energy anticipates completing this divestiture by the end of the year.