Canadian Natural Resources has signed a deal to buy the Canadian operations of Devon Energy for CAD $3.8 billion with asset portfolio that includes thermal in situ oilsands production and conventional primary heavy crude oil operations located adjacent to existing Canadian Natural assets.
The production acquired under the deal totals 128,300 barrels per day, including 108,200 from the thermal in situ operations and 20,100 from the conventional operations. It includes 607,000 hectares of land, of which 405,000 hectares are undeveloped, providing significant upside value and opportunities.
Devon’s heavy oil assets are principally located in the province of Alberta, with net production averaging 113,000 oil-equivalent barrels in the first quarter of 2019. At year-end 2018, proved reserves associated with these properties amounted to approximately 409 million barrels of oil. Field-level cash flow accompanying these assets, which excludes overhead costs, totaled $236 million in 2018.
Proceeds from the sale, which is expected to close on June 27, will be used for debt reduction. President and CEO Dave Hager said, “The sale of Canada is an important step in executing Devon’s transformation to a U.S. oil growth business. This transaction creates value for our shareholders by achieving a clean and timely exit from Canada, while accelerating efforts to focus exclusively on our high-return U.S. oil portfolio.”
Devon put its Canadian assets up for sale February. It is the latest foreign company to reduce its ownership in the oilsands over the past few years, including Norway’s Statoil, France’s Total SA, Arkansas-based Murphy Oil, and Houston-based ConocoPhillips.