Devon Energy announced an accelerated closing of its $770 million sale of its Barnett Shale assets in North Texas to Banpu Kalnin Ventures.
The deal announced last December was to close by Dec. 31, 2020. Now it will be closed on Oct. 1, 2020.
Devon Energy will get $300 million at the closing and its board of directors has approved a $100 million special dividend that is equal to 26 cents per share.
The special dividend is payable on Oct. 1, 2020, to shareholders of record at the close of business on Aug. 14, 2020. This special dividend is in addition to the regular quarterly cash dividend of 11 cents.
The agreement also provides Devon the opportunity for contingent cash payments of up to $260 million based on future commodity prices.
The contingent payments will be available from 2021 through 2024.
Another important initiative the company announced is a plan to deliver sustainable, cash-cost reductions 0of $300 million by year-end 2020.
A key contributing factor to the plan is Devon’s intent to repurchase up to $1.5 billion of its outstanding debt. That is expected to produce savings of $75 million on an annual run-rate basis.
The company reported a second quarter 2020 net loss of $670 million or $1.78 per share on revenues of $394 million.
The company said production grew by 6% to 153,000 barrels per day.
No curtailment is expected in 2H 2020, it said.
It had curtailed about 10,000 barrels per day in 1H 2020.
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