* Deal includes assets onshore Gulf Coast, Rockies,
* Assets being sold produce 275 mmcfe gas per day
(Adds details from statements, background)
June 30 Devon Energy Corp said it would
sell its remaining non-core gas-rich properties to peer Linn
Energy LLC for $2.3 billion to focus on more lucrative
oil assets and cut debt.
This is Linn's biggest deal since it bought Berry Petroleum
Co in December through a holding company set up for
The asset sale by Devon includes about 900,000 net acres
spread across the Rockies, onshore Gulf Coast and some
mid-continent regions, including all or parts of Kansas,
Oklahoma, Texas, Arkansas and Louisiana.
These assets produce 275 million cubic feet of gas
equivalent per day, about 80 percent of which is natural gas.
They contributed about 7 percent to Devon's total oil and gas
output in the first quarter.
Devon and many other North American oil and gas producers
have been selling off their natural gas holdings to focus on
more profitable crude oil assets. Prices of natural have slumped
after a shale boom in the United States.
Encana Corp, Canada's largest natural gas producer
, said last week it would sell its Bighorn gas properties
in Alberta, properties in Wyoming's Jonah natural gas field and
about 90,000 net acres in east Texas.
Devon itself has raised more than $5 billion from the sale
of non-core assets over the past few quarters.
It sold off some natural gas assets in Canada late last year
and bought oil-producing assets in the Eagle Ford shale region
of south Texas.
The company said on Monday it expects to have reduced its
net debt by more than $4 billion this year after the completion
of the deal, likely by the end of the third quarter.
"With this sale, we now see a new Devon emerging with fourth
quarter as the first clean quarter for the clean, go forward
portfolio that is expected to deliver on peer leading growth,"
Global Hunter Securities analysts wrote in a note.
Oil and natural gas liquids are expected to account for
about 60 percent of Devon's output by year-end, Chief Executive
John Richels said, adding that the company was targeting
multi-year oil production growth of more than 20 percent.
Linn said it would fund the deal by selling its Granite Wash
assets spread over Texas Panhandle and western Oklahoma as well
as other non-producing acreage. It has also secured a $2.3
Devon's shares were little changed at $79.49 in afternoon
trading on the New York Stock Exchange. Linn's shares were up
nearly 2 percent at $32.44 on the Nasdaq.
Jefferies LLC and Credit Suisse Securities (USA) LLC were
financial advisers to Devon. Vinson & Elkins LLP was its legal
adviser. Scotia Waterous was the financial adviser for Linn.
($1 = 1.0664 Canadian Dollars)
(Reporting by Anannya Pramanick in Bangalore; Editing by Don
Sebastian and Saumyadeb Chakrabarty)