Devon Energy Corp., Oklahoma City, and Cimarex Energy Co., Denver, reported entering into an acquisition scheme for assets primarily in the Cana-Woodford shale play in western Oklahoma.
Cimarex signed a purchase and sale agreement to acquire the assets for $497.4 million in cash. Simultaneously, Cimarex entered into an agreement with Devon to sell at closing a 50% interest in these assets for $248.7 million.
The acquisition is expected to close on or before June 30.
Cimarex’s share of the assets includes its estimate of proved developed reserves of about 140 bcf of gas equivalent (64% gas) at Jan. 1, current production of about 35 MMcfed (63% gas) and 50,000 net acres, including 30,000 net acres in the Cana-Woodford area and oil-rich East Cana area. About 65% of the proved developed reserves are associated with properties in which Cimarex already owns a working interest, the company said.
Devon’s portion of the agreed acquisition, meanwhile, includes current production of 5,800 boe/d (37% liquids) and proved reserves of about 23 million boe as of Jan. 1.
“Consistent with our philosophy to add scale and scope to our operations, this acquisition significantly bolsters our position in one of our liquids-rich core development areas,” said Devon Chief Operating Officer Dave Hager, adding, “These assets directly overlap our existing core Cana position and expand our exposure to other western Oklahoma oil and gas plays.”
Tom Jorden, Cimarex chairman and chief executive officer, said, “This acquisition is a perfect bolt-on for Cimarex as it consolidates working interest ownership in the Cana core infill development project area while adding exposure to other western Oklahoma oil and gas plays.”
Cimarex has its principal operations in the US Midcontinent and Permian basin.