Devon, Crosstex to buy Barnett shale assets

By OGJ editors
HOUSTON, May 2 -- Devon Energy Corp., Oklahoma City, projects drilling of 800 wells in 5 years on Barnett shale acreage it will acquire from privately owned Chief Holdings LLC.

Devon agreed to acquire Chief's oil and gas properties $2.2 billion in cash.

In a related transaction, Crosstex Energy LP, Dallas, plans to pay $480 million for Chief's gas gathering pipelines and midstream assets in the Barnett shale producing region.

Devon and Crosstex said they made their offers jointly. Both companies expect to close their deals June 29.

Devon estimates the acquired properties include proved reserves of
617 bcf of gas equivalent and 169,000 net acres in leasehold.

J. Larry Nichols, Devon's chairman and chief executive officer, said that after closing, Devon's Barnett shale interests will cover 720,000 net acres.

As a result of the Chief acquisition, Devon expects to increase its 2006 capital budget for exploration and development expenditures by $125 million. Operating and general and administrative expenses will also increase modestly as a result of the acquisition, Devon said.

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