Devon – Sinopec JV Across 5 New Oil & Gas Plays Agreed

by Kenneth E. DuBose on January 4, 2012

Devon Energy and Sinopec (China) have inked a joint-venture (JV) deal worth $2.2 billion for a 1/3 interest in Devon’s acreage across five new venture plays. Devon is selling an interest in 1.2 million net acres for a little more than $5,000 per acre across several emerging plays:

The companies have added 235,000 net acres in the Ohio Utica Shale prior to the announcement of the agreement. The new Utica acreage brings the total acreage covered and price to over 1.4 million acres and $2.5 billion.

Sinopec is acquiring a little over 470,000 net acres across the two plays and will pay $900 million up front and will then carry 80% of development costs until the remaining $1.6 billion balance in spent. Devon and Sinopec expect to reach that amount of spend sometime in 2014.

The JV plans to drilling approximately 125 gross wells in 2012 and future capital allocation between the plays will likely be directed based on exploration results from the coming year.

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