Devon Energy to Sell Latin American Assets

Devon Energy is planning to sell several of its Latin American assets, located in Argentina and Brazil. Devon is increasing its focus on North America and is divesting non-strategic assets. "Through 2002 you can look for Devon to be focused in West Africa, China and Azerbaijan," in a statement by Larry Nichols, president. Devon wants to divest properties that are not central to its core are of operations, are expensive to operate or have limited upside potential.

Devon intends to sell its 100% interest in Argentine subsidiary Petrolera Santa Fe. As of October 1, 2001, Santa Fe had 1,000boe/day production (62% oil) in seven fields in three basins. Production in the San Jorge basin is 5,300boe/day of 23 degrees API oil, and Santa Fe owns a 22% non-operating interest in the El Tordillo, Puesto Quiroga and La Tapera blocks. In the Neuquen basin production is 26 million cubic feet/day dry gas, and Santa Fe owns a 20% operating interest in the Sierra Chata gas field, where there are 50 identified un-drilled locations; as well as a 100% interest in the undeveloped El Mangrullo gas field. Santa Fe owns 100% of the Refugio-Tupungato and Atamisqui blocks in the Cuyo basin, where production is 1,300 bpd of 32 degree API oil.

Devon will sell the assets as a single package and has retained Salomon Smith Barney and Waterous & Co to promote the sale, which will be made through a competitive auction process. Devon will open a data room in Houston from mid-December through mid-February, and has set February 15 as the deadline for receiving bids. SSB and Waterous would be talking to all logical buyers for the sale.

Devon will be selling its Carauna oilfield in the Potiguar basin off Ceara state, where exploration results have not reached expectations. The field is operated in partnership with Petrobras, Repsol-YPF and Sotep. Devon also owns 45% of the BM-C-8 offshore block in the Campos basin, operates the BPOT-2 block in the offshore Potiguar basin, together with Repsol-YPF participates in BES-3 gas block in the offshore Espirito Santo basin, and participates in the BSEAL-4 block in the Sergipe-Alagoas basin.