Devon Energy acquires 253,000 acres in the Powder River Basin

(Powder River Basin, Wyo.) - Devon Energy Corp. today announced it has agreed to acquire 253,000 net acres in the Powder River Basin for $600 million. The acquired Powder River Basin acreage is located to the south of Devon’s legacy position in Wyoming and includes production of 7,000 oil-equivalent barrels (Boe) per day, with approximately 85 percent oil. This leasehold resides in the core of the Powder River oil fairway and is most prospective for the Parkman, Turner and Teapot formations. The contiguous acreage allows for extended-reach horizontal drilling and the Company has conservatively identified 500 development-ready locations with potential for as many as 2,700 unrisked locations as appraisal drilling furtherderisks multiple formations in the oil fairway. “This opportunistic transaction adds scale and scope to our Powder River Basin operations, creating the largest and highest quality acreage position in the industry,” said Vaughn. “Our Powder River programs are delivering some of the best returns at Devon, and we will apply our unique basin knowledge to efficiently develop and derisk this premium acreage position.” After deducting the value of current production at $30,000 per flowing barrel and $100 million of midstream infrastructure, Devon secured the undeveloped leasehold at roughly $1,100 per acre. Upon closing the transaction, Devon’s daily production from its Rockies business unit will increase to more than 30,000 Boe per day, and its Powder River Basin leasehold position will more than double to 470,000 net acres with stacked-pay potential across multiple oil-prone formations. The size of the opportunity is significant with several billion barrels of unrisked resource across the basin. #county17 #news