Devon Energy Makes Property Acquisition in Western Canada
Devon Energy has acquired oil and gas properties in the Iron River area of western Canada from ExxonMobil Canada Energy. The purchase price was approximately (U.S.) $200 million.
Iron River is located 120 miles northeast of Edmonton, Alberta. The acquisition includes 208 net sections of heavy oil leases and 51 net sections of conventional oil and gas leases. These leases encompass approximately 165,000 net acres with an average working interest of approximately 96 percent. The acreage is largely undeveloped.
Similarities to Devon's Manatokan Field
Iron River is located northeast of and immediately adjacent to Devon's Manatokan field, which produces 7,000 barrels of oil per day from about 300 wells. Devon believes Manatokan is a direct analogy to Iron River in terms of geology, reservoir characteristics, oil quality and operations. About 85 percent of Devon's wells in the Manatokan field have been successful. It is the largest and best performing field in Devon's Lloydminster project area.
"We pursued this acquisition because of Iron River's similarities to our Manatokan field and the success we have enjoyed there," commented Stephen J. Hadden, Devon's senior vice president, exploration and production. "It represents several years of low risk drilling, including 70 locations that are drill-ready today. Iron River is exactly the kind of repeatable, cost- effective development project that exemplifies Devon's North American onshore property base. We can generally drill year-round in the Lloydminster area, and we plan to have four or five rigs running at Iron River in the third quarter of 2005."
The company anticipates drilling in excess of 800 wells on the Iron River
property over the next four years. This ramp-up of drilling activity is
expected to boost production from its current level of less than 3,000 barrels
of oil per day to approximately 30,000 barrels per day by 2010. Iron River is
expected to add approximately 700,000 barrels of oil equivalent to Devon's
Operates 13 Offshore Rigs
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