UPDATE 3-Devon sells some gas assets as oil focus pays off
* 4th-qtr adjusted profit $1.10/share vs est $1.08
* Plans to use proceeds to repay debt from Eagle Ford asset purchase
* Canadian Natural says to sell or fold acquired royalty revenue into new vehicle
* Devon shares rise 3 pct premarket
* Capex seen slightly lower at $4.8 bln to $5.2 bln
By Swetha Gopinath and Anna Driver
Feb 19 (Reuters) - Devon Energy Corp said on Wednesday that it would sell some liquids-rich natural gas assets in Canada to Canadian Natural Resources Ltd for about $2.8 billion and posted a better-than-expected profit as it produced more profitable crude oil.
Devon shares were up 3 pct while Canadian Natural's shares traded in Toronto rose 4.6 percent.
Devon, along with many other U.S. oil and gas producers, has been selling off its natural gas holdings to focus on more profitable crude oil assets in North America.
To help achieve that aim, Devon has made some radical changes, including the $6 billion purchase of oil-producing properties in the Eagle Ford formation in south Texas in November.
"We're not investing in gas properties or dry gas properties at this time," John Richels, Devon's chief executive officer told investors on a conference call.
Devon said it plans to use proceeds from the asset sale to repay debt incurred in the Eagle Ford deal.
This year, Devon expects to spend $4.8 billion to $5.2 billon, slightly lower than 2013, drilling wells in places that produce crude oil like Texas' Permian Basin.
After the deal with Canadian Natural, Devon's only Canadian assets are its Horn River gas holdings in northern British Columbia and heavy oil properties in Alberta.
Devon is also looking to sell other non-core natural gas assets in the United States that produced 144,000 barrels of oil equivalent per day in the fourth quarter.
The company's oil production rose 17 percent to 177,000 barrels per day in the fourth quarter output from its Permian Basin wells in Texas grew. This year oil production is forecast at 198,000 to 216,000 barrels per say, Devon said.
"Our pursuit of oil production resulted in higher revenue and improved profitability," Richels told investors.
Adjusted profit was $1.10 per diluted share. Analysts on average had expected $1.08, according to Thomson Reuters I/B/E/S.
The acquisition is Canadian Natural's largest since 1996, when it bought Anadarko Petroleum Corp's Canadian unit for $4.1 billion. It came as a surprise to most because the Devon assets are natural-gas rich and Canadian Natural has limited spending on its already substantial suite of gas assets because of low prices.
But the company said it sees an opportunity to squeeze down costs on Devon's properties and boost production of valuable natural-gas liquids and oil.
It also believes that gas prices may strengthen on depleted U.S. storage levels.
"That helps the metrics of this deal but that's not the driver," Steve Laut, Canadian Natural's president, said on a conference call. "It's the assets themselves and the ability to integrate those assets ... and just develop some light oil properties and liquids-rich natural gas on these properties that drive the acquisition."
Adding Devon's 383 million cubic feet per day of gas production will push Canadian Natural's output of the fuel to around 1.5 billion cubic feet per day, about the same as Encana Corp, now the largest producer of gas in Canada.
"It's a good deal for them," said David McColl, an analyst with Morningstar. Price-wise it's a good deal and asset-wise."
The company said the acquired royalty revenue would either be folded into a new vehicle to provide steady cash flow to existing shareholders or be sold off later this year.
Shares of Devon rose $1.93 to $64.84 in midday New York Stock Exchange trading. Canadian Natural shares were up C$1.83 to C$41.00 on the Toronto Stock Exchange.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.