Devon Energy Announces C$3.125 Billion Sale of Canadian Conventional Assets

OKLAHOMA CITY–(BUSINESS WIRE)–Devon Energy Corporation (NYSE:DVN) today announced that it has entered into a definitive agreement to sell the majority of its Canadian conventional assets to Canadian Natural Resources Limited for C$3.125 billion, or US$2.8 billion using the current exchange rate. The sale excludes the company’s Horn River, Lloydminster and thermal heavy oil assets located in Canada. At December 31, 2013, proved reserves associated with the divestiture totaled approximately 170 million barrels equivalent. The transaction is subject to customary terms and conditions and is expected to close early in the second quarter of 2014.

“This tax-efficient transaction provides for a clean exit from our Canadian conventional business at a value of nearly 7 times 2013 EBITDA, a substantial premium compared to Devon’s current trading multiple. Furthermore, the timely execution of the largest piece of our non-core divestiture process accelerates the refocus on core assets.”

Upon close of the transaction, the company plans to immediately repatriate the proceeds to the U.S. for use in the repayment of debt incurred to finance its Eagle Ford acquisition. The company expects net proceeds of US$2.7 billion after adjusting for currency exchange and taxes associated with the sale and repatriation of the funds to the U.S.

“This agreement represents a significant step forward in the execution of our non-core divestiture process,” said John Richels, president and chief executive officer. “This tax-efficient transaction provides for a clean exit from our Canadian conventional business at a value of nearly 7 times 2013 EBITDA, a substantial premium compared to Devon’s current trading multiple. Furthermore, the timely execution of the largest piece of our non-core divestiture process accelerates the refocus on core assets.”

The divestiture process is ongoing for the company’s remaining non-core properties in the U.S. Devon expects to complete these U.S. divestitures by year end.

Advisors

Scotia Waterous acted as lead financial advisor to Devon on the transaction. BMO Capital Markets also acted as a financial advisor to Devon on the transaction and has provided a fairness opinion to the Board of Directors of Devon. Osler, Hoskin & Harcourt LLP acted as legal advisor to Devon.

Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production. Devon is a leading U.S.-based independent oil and gas producer and is included in the S&P 500 Index. For additional information, visit www.devonenergy.com.

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