Devon Energy Corporation Announces $1.4 Billion Joint Venture

Devon Energy Corporation announced it has signed an agreement with Sumitomo Corporation whereby Sumitomo will invest $1.4 billion in exchange for 30% of Devon’s interest in approximately 650,000 net acres in the Cline Shale and the Midland-Wolfcamp Shale. Under the terms of the agreement, Sumitomo will invest $340 million in cash upon closing and an additional $1.025 billion will be invested in the form of a drilling carry. The drilling carry will fund 70 percent of Devon’s capital requirements, resulting in Sumitomo paying 79 percent of the overall drilling and completion costs during the carry period. For the full-year 2012, the partnership expects to drill approximately 40 gross wells. Based on the current work plan, Devon expects the entire $1.025 billion carry to be realized by mid-2014.