Devon Energy To Sell 50% Stake In Access Pipeline For $1.1 Bln

(RTTNews) - Devon Energy Corp. (DVN) announced Thursday that it has entered into a definitive agreement to sell its 50 percent ownership interest in Access Pipeline to Wolf Midstream Inc., for C$1.4 billion, or $1.1 billion, using current exchange rates.

The agreement also includes the potential for an incremental C$150 million payment with the sanctioning and development of a new thermal-oil project on Devon's Pike lease in Alberta, Canada.

Wolf Midstream is a portfolio company of Canada Pension Plan Investment Board.

Under terms of the sale agreement, Devon's thermal-oil acreage is dedicated to Access Pipeline for an initial term of 25 years. The agreement also includes the potential for the Access Pipeline toll to be reduced by as much as 30 percent with the development of new thermal-oil projects in the future.

The Company's next potential project is the first phase of Pike, which is located immediately adjacent to the Jackfish complex. Devon is the operator of this joint venture leasehold with a 50 percent working interest.

The transaction is subject to regulatory approvals along with customary terms and conditions. Closing is expected in the third quarter of 2016.

Dave Hager, president and CEO, said, "With the highly-accretive sale of Access, Devon's divestiture program is now complete with proceeds totaling $3.2 billion, surpassing the top end of our $2 billion to $3 billion guidance range. Furthermore, the divestiture proceeds significantly strengthen our investment-grade balance sheet and position us to further accelerate investment in our best-in-class U.S. resource plays, led by the STACK and Delaware Basin."

In early June, Devon Energy announced that it has agreed for additional $1 billion of upstream asset sales to undisclosed parties.