Devon Energy Completes Acquisition of Chief Holdings; Boosts Activity in the Barnett Shale

abarrelfullabarrelfull wrote on 20 Jul 2015 12:32

June 29 2006

Devon Energy Corporation (NYSE: DVN) dramatically boosted its presence in the Barnett Shale in north Texas today by completing the $2.2 billion acquisition of Chief Holdings LLC. Devon announced the all-cash transaction for privately held Chief on May 2, 2006. The acquired properties include estimated proved reserves of 617 billion cubic feet of natural gas equivalent and leasehold totaling 169,000 net acres.

The acquisition increases Devon's presence in the Barnett Shale and opens the way to accelerated drilling activity as the company increases its rig fleet from 20 to 26. By the end of this year, the company will have 30 rigs operating over a lease position of 721,000 net acres. Devon has a capital budget of $900 million for exploration and development operations on the combined Barnett properties this year.

On a net basis, the combined companies currently produce about 645 million cubic feet per day of natural gas equivalent from more than 2,500 Barnett wells. This accounts for about half of overall production from the Barnett, which is considered the largest natural gas field in Texas.

"This transaction affirms our continued commitment as a leader in the Barnett Shale's development," said J. Larry Nichols, Devon's chairman and chief executive officer. "The company is continuing to pursue new innovations and advanced applications of technology to further enhance our ability to draw from the enormous volumes of gas in place within the Barnett Shale trend."

Devon established its position in the Barnett Shale through a 2002 acquisition of Mitchell Energy. Since then Devon has drilled more than 1,300 wells in the field and produced more than 800 billion cubic feet of gas equivalent net to its interest. Devon has also added 1.3 trillion cubic feet of natural gas equivalent proved reserves over a lease position focused primarily in Wise, Denton, Tarrant, Parker, Johnson and Hood counties. Including the Chief assets, Devon expects its Barnett Shale properties to ultimately produce more than eight trillion cubic feet of gas equivalent.

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