The chief executive of oil and gas producer Devon Energy Corp. on Monday said it is in talks with a buyer for its Egyptian assets and said it did not need to make any large acquisitions to meet its growth targets.
“We think we have created a very strong portfolio of North American assets,” Larry Nichols, Devon’s CEO, told Reuters. “Today, there are only two meaningful areas where you can grow oil and gas plays in North America. One is the heavy oil in Canada and two is the deepwater in the Gulf of Mexico.
“We are the only independent that has a meaningful position in both,” he said.
Oklahoma City-based Devon is often the target of market takeover speculation. Nichols said he had no idea if any larger oil companies, who are finding it increasingly difficult to find assets, were interested.
“If the majors want to buy us, it’s up to them,” he said.
He said that right now, any independent oil and gas company could only be acquired for a hefty premium, so Devon is not looking to buy another company.
“If you look at where we are in North America, we don’t need to make a large acquisition because we are already there,” he said, adding that any deal could be done at the right price.
Earlier, Nichols told investors that the company was in negotiations with who he believed would be the buyer for its assets in Egypt. Devon also has put its Western Africa assets on the block and Nichols said there was strong interest from foreign companies for both.
Devon said in November it planned to sell its Egyptian oil and gas assets, which produce about 5,000 barrels of oil equivalent per day.
Nichols also told investors that Devon was not planning to bid for the oil and gas assets that Dominion Resources has put up for sale.
“That rumor had been out there for sometime,” Nichols said. “It was false. The market had been misled by that false rumor.”
Dominion has said it expects to close the sale of the assets in the Gulf of Mexico, West Texas, the US mid-continent, Rockies and Western Canada around the middle of the year.
Devon also repeated its expectations for its properties in the Barnett Shale fields to produce about 800 million cubic feet equivalent of natural gas per day by the end of 2007, Chief Executive Larry Nichols said on Monday.
Devon, the largest producer in the Barnett Shale in northern Texas, has said its production there reached 700 million CFE per day at the end of 2006.
The company expects to invest $1.1 billion in those fields and drill 385 wells there this year.
“This field had continued significant economic possibilities for Devon,” Nichols told the Howard Weil energy conference.
(Daily Star & Reuters)