NEW YORK CITY: US oil and gas firm Devon Energy announced yesterday that it will acquire a significant stake in a sought-after Texas oil project for $6bn from GeoSouthern Energy.
The all-cash deal grants Devon 82,000 net acres in the sprawling Eagle Ford shale formation in southern Texas that currently produce 53,000 barrels of oil per day.
Devon, a pioneer in the US shale gas boom, said the transaction would enable it to boost its output of oil, which currently has a better price outlook than natural gas.
“With this transaction, we have secured a premier acreage position in the very best part of the world-class Eagle Ford oil play,” said chief executive John Richels.
Devon plans to boost investment in order to achieve annual production growth of 25 percent, reaching a peak of 140,000 barrels of oil-equivalent per day. The company said its experience with other vast energy projects was a “core competency” that would be exploited in the venture.
Blackstone private equity ventures, which in 2011 formed a joint venture with GeoSouthern to accelerate development of the Eagle Ford shale, will get $1.54 billion in the deal.
“GeoSouthern was one of the pioneers of the Eagle Ford,” said Angelo Acconcia, a managing director with Blackstone Energy Partners.
The Eagle Ford formation is one of a number of hot exploration locations in the United States for shale oil and shale gas that have enabled the country to reduce oil imports and cut its dependency on foreign suppliers. AFP
