A month after Devon Energy’s President and CEO Clay Gaspar said the company was moving quickly to evaluate its portfolio and perhaps make some divestitures, a report has surfaced that the one-time Oklahoma City headquartered company is considering sales of assets in south Texas and Wyoming.
Bloomberg first reported that Devon Energy Corp. is exploring the sale of its Eagle Ford and Powder River shale assets as part of an effort to streamline the corporate portfolio. It would be considered a move that could bring more than $4 billion for the company that recently moved its headquarters to Houston, Texas but kept large operations in Oklahoma City where it’s 50-story office tower headlines the city’s skyline.
According to the Financial Post, Devon aims to announce a strategic review of the assets in question when the earnings report is revealed in early August. Devon plans to release it second quarter earnings report on Tuesday, August 4 and follow the release with a conference call the following morning at 10 a.m. Central Time.
The article is based on certain sources who were not identified and a representative for Devon did not respond immediately to requests for comment.
But the sources indicated a final decision has not been made and the timing might change. Devon could even decide to continue with the Eagle Ford and Powder River Basin assets. Ever since Devon merged with Coterra Energy Inc. in a $58 billion deal earlier this year, investors have pressured company leaders to unload some assets and put more focus on the Permian Basin in West Texas and New Mexico.
“Acquiring Coterra further diversifies a fairly diffuse asset base,” Vince Piazza, an analyst at Bloomberg Intelligence, wrote in a July 20 report. “Though Permian concentration will grow, asset sales will likely be needed.”
Kimmeridge Energy Management Co., an outspoken shale investor, criticized Devon’s divestment program this month as too slow. Toms Capital Investment Management, a top-five shareholder in the stock, is considering all options to spur action at Devon, Bloomberg News reported this month.
Devon Energy’s operations in the Eagle Ford of South Texas are located primarily in DeWitt and Karnes counties.
Devon made some key acquisitions in the Eagle Ford including the $6 billion GeoSouthern Energy deal in 2014 involving 82,000 net acres and the $1.8 billion Validus Energy bolt-on acquisition in 2022, a deal involving 42,000 net acres in Karnes County.
Devon’s Powder River basin operations are largely in northeastern Wyoming’s Converse, Campbell and surrounding counties.
Devon develops formations including the Niobrara, Turner, Parkman and Teapot and treats the assets as part of its Rockies portfolio.
