Devon Energy to Divest Egyptian Assets
Devon Energy intends to divest its oil and gas assets and terminate its operations in Egypt. The company's oil and gas production from Egypt is currently about five thousand oil-equivalent barrels per day. Egypt represents less than one percent of both Devon's companywide production and proved reserves.
"Our decision to exit Egypt is primarily a matter of focus," said Stephen J. Hadden, senior vice president, exploration and production. "Devon's strategy continues to be to concentrate our resources in areas that can provide meaningful future growth in companywide production and value. Although we have established a solid production base and hold a sizable suite of exploration opportunities in Egypt, we believe we can redeploy our resources from Egypt to projects in and outside North America that better fit our focused growth strategy."
"We also perceive the market conditions for international properties with exploration and exploitation potential as very favorable today," added Hadden. "Our Egyptian business could provide a stand-alone entry point for a newcomer or complement the business of an operator already established in the region."
Devon obtained its assets in Egypt primarily through the acquisition of Ocean Energy in 2003. The assets to be offered include interests in eight concessions, four in the Western Desert and four in the Gulf of Suez. Four of the concessions are producing. The concessions comprise approximately 3.7 million gross (1.8 million net) acres.
The sale process will be managed for Devon by Scotia Waterous. Data rooms for interested buyers will be opened in Houston and London in December. Acceptance of bids and completion of a purchase and sale agreement are anticipated in the first quarter of 2007. Devon did not announce an expected sale price.
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