Devon Energy has completed a transaction to acquire an interest in the Drunkard's Wash coalbed natural gas field in east-central Utah held by a subsidiary of Chevron Corporation. In the transaction, Devon transferred its 14.2 million shares of Chevron common stock to Chevron. In exchange, Devon received Chevron's interest in the Drunkard's Wash field and $280 million in cash.
Devon has held shares in Chevron since Devon acquired PennzEnergy in 1999. In August 2008, Devon retired exchangeable debentures originally issued by PennzEnergy that were associated with the Chevron shares. After retiring the exchangeable debentures, Devon was able to enter into this exchange transaction with Chevron.
In the exchange, Devon acquired a 44 percent working interest in the Drunkard's Wash field. The field is approximately 51,000 net acres with current net production of about 40 million cubic feet of natural gas
"Drunkard's Wash adds an attractive growth driver to our unconventional gas portfolio, and the cash we received further enhances our financial flexibility," commented John Richels, Devon's president.
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