Devon Energy Corp., Oklahoma City, closed the sale of its Barnett shale assets to Banpu Kalnin Ventures (BKV).
Devon received a cash payment of $320 million from BKV at closing, after adjusting for a $170 million deposit received in April and purchase-price adjustments that, among other things, allocate revenues and expenses based on a Sept. 1, 2019, effective date (OGJ Online, Apr. 14, 2020).
The sale agreement with BKV provides Devon the opportunity for contingent cash payments of up to $260 million based upon future commodity prices, with upside participation beginning at either a $2.75 Henry Hub natural gas price or a $50 WTI oil price. The contingent payment period begins Jan. 1, 2021 and has a term of 4 years. BKV’s combined Marcellus and Barnett portfolio now holds over 345,000 net acres, operates more than 4,000 producing wells, and holds proved reserves in excess of 3.7 tcfe.
The transaction includes over 320,000 gross acres and 4,200 producing wells. Net production from the properties averaged 597 MMcfed in third-quarter 2019 when the original deal was struck (OGJ Online, Dec. 18, 2019).