Devon Energy Closes $1.4 bn Sumitomo JV
Devon Energy Corporation has announced the closing of its $1.4 billion joint venture agreement with Sumitomo Corporation. The joint venture covers approximately 650,000 net acres in the Cline Shale and the Midland-Wolfcamp Shale. Sumitomo will invest $1.4 billion in exchange for 30 percent of Devon’s interest in these projects.
At closing, Sumitomo invested $410 million in cash, composed of the initial cash contribution and Sumitomo’s share of costs since the effective date of the transaction. The remaining $980 millionwill be invested in the form of a drilling carry. The drilling carry will fund 70 percent of Devon’s capital requirements, resulting in Sumitomo paying 79 percent of the overall drilling and completion costs during the carry period. Devon will serve as operator and expects the entire drilling carry to be realized by mid-2014.