Devon Energy is selling its position in Texas’ Barnett shale for $770 million, leaving the birthplace of the shale revolution without any top industry players.
The shale boom started with George P. Mitchell in the Dallas-Fort Worth metroplex’s Barnett shale and he eventually sold his Mitchell Energy to Oklahoma-based Devon in 2002 for more than $3 billion.
As the shale boom shifted from natural gas to crude oil and from East Texas to West Texas’ Permian Basin, the Barnett has seen its activity plunge from a peak of about 200 rigs in 2008 down to just one remaining active drilling rig today, according to the weekly count from the oil field services firm Baker Hughes.
After selling other parts of its Barnett position previously, Devon will exit the region with the $770 million sale to a Denver-based private equity firm called Kalnin Ventures, which is primarily backed by the Thailand coal-mining and power giant Banpu. The shale position will be operated by BKV Oil & Gas Capital Partners.
The deal includes more than 320,000 gross acres and 4,200 producing wells, making BKV the biggest producer in the Barnett once the deal closes next year.
“Devon’s transformation to a U.S. oil growth business is now complete,” said Chief Executive Dave Hager. “The Barnett Shale has been a cornerstone asset for Devon over the past two decades. With this change in ownership, it is great to see our talented and innovative employees supporting this high-quality gas asset transition to a world-class company like Banpu.”
The Barnett acreage produces about 600 million cubic feet of natural gas equivalent per day.
“This deal represents our continued belief in the long-term potential of U.S. shale gas and is fully in line with Banpu’s vision of developing a greener and smarter energy portfolio,” said BKV CEO Christopher Kalnin.
Kalnin is referencing a greener energy portfolio because natural gas burns relatively cleaner than coal. BKV also has natural gas assets in Pennsylvania’s Marcellus shale.
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