Devon to Sell Western Canada Pipeline Stake to CPPIB
Devon Energy Corp said it would sell its 50 percent stake in a pipeline in Western Canada for $1.1 billion to a portfolio company of Canada Pension Plan Investment Board, completing the U.S. oil and natural gas producer's divesture program.
The deal is the third in the energy sector in recent weeks involving CPPIB, which aims to take advantage of a fall in asset valuations due to a prolonged crude price slump.
"With the highly accretive sale of Access (pipeline), Devon's divestiture program is now complete with proceeds totaling $3.2 billion, surpassing the top end of our $2 billion to $3 billion guidance range," Chief Executive Dave Hager said on Thursday.
With the sale of the Access pipeline, which carries heavy oil across northeastern Alberta, Devon's pipeline assets will be limited to those held through EnLink Midstream Partners LP , a master limited partnership Devon helped create in 2014.
The proceeds from the sale of Access stake to Wolf Midstream Inc will accelerate Devon's investment in U.S. shale plays, including the Stack Basin in Oklahoma and Delaware Basin, Hager said.
Devon's partner in the pipeline, Calgary-based MEG Energy Corp, has also been looking to sell a part, or all, of its stake in the system, but has yet to make an announcement.
MEG Chief Executive William McCaffrey said in April that talks were progressing on the sale, adding that more than one party was interested in the asset.
(Reporting by Amrutha Gayathri in Bengaluru)
