Devon Energy Corp. has announced that it has entered into a definitive agreement to sell its 50% ownership interest in Access Pipeline to Wolf Midstream Inc., for CAN$1.4 billion. The agreement also includes the potential for an incremental CAN$150 million payment with the sanctioning and development of a new thermal-oil project on Devon’s Pike lease in Alberta, Canada.
“With the highly-accretive sale of Access, Devon’s divestiture program is now complete with proceeds totaling CAN$3.2 billion, surpassing the top end of our CAN$2 billion to CAN$3 billion guidance range,” said Dave Hager, President and CEO. “Furthermore, the divestiture proceeds significantly strengthen our investment-grade balance sheet and position us to further accelerate investment in our best-in-class US resource plays, led by the STACK and Delaware Basin.”
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% with the development of new thermal-oil projects in the future.
The transaction is subject to regulatory approvals along with customary terms and conditions. Closing is expected in 3Q16. Bennett Jones LLP acted as legal advisor to Devon.