Devon Energy is selling its 50pc interest in the 350,000 b/d Access oil pipeline in Alberta to Wolf Midstream for $1.1bn.
Access is a diluted bitumen line that runs from Conklin, Alberta, to the Sturgeon terminal near Edmonton.
The deal includes the potential for another $116mn payment if a new thermal-oil project in Devon's Pike lease in Alberta is successfully developed.
Under the terms of the deal, Devon's thermal-oil acreage will be dedicated to the Access pipeline for an initial term of 25 years.
With the sale, Devon has completed its divestiture program with $3.2bn in sales, surpassing the top end of its $2bn-$3bn guidance, said chief executive Dave Hager.
The deal is expected to close in the third quarter.
Devon and other oil and natural gas producers such as Chesapeake Energy and Whiting Petroleum are selling assets to cope with low oil and gas prices.
In 2014, Devon merged much of its midstream business into Crosstex Energy to form EnLink, which was given right of first offer to buy its share of Access. No sale materialized
Wolf Midstream is backed by the Canada Pension Plan Investment Board. Canadian independent MEG Energy owns the other half of the Access line.
Source: Argus Media
Date: Jul 15, 2016