The move by Oklahoma City’s Devon Energy Corp. to sell its stake in Enlink Midstream Partners LP for $3.13 billion and expand its buyback of shares is working.
Shares of the company rose 6.8% to $42 a day after making the announcement that it not only sold its part of Enlink to an affiliate of Global Infrastructure Partners but was expanding a share buyback program to $3 billion. At one point, the cost of a share was up 8%.
Devon is still trying to unload or divest another $1 billion in assets and also continues putting more focus on the Delaware portion of the Permian shale basin in Texas and New Mexico. And don’t forget the STACK in Oklahoma where the company has a heavy presence. The sale also pushed Devon past a $5 billion divestment target announced earlier in the year.
But the remaining divestment targets include Devon holdings in the Eagle Ford shale in South Texas, the Powder River Basin in Wyoming and”non-core” properties in the Permian.
“The sale of our EnLink interests represents a significant step forward in achieving our 2020 Vision to further simplify our asset portfolio,” Hager said in the company statement announcing the sale. In March, Devon said it would raise its dividend by 33%, starting in the second quarter, and announced a $553-million sale of drilling rights in the Barnett shale.
The sale won’t be closed until July. EnLink has operations in Oklahoma, Texas, Louisiana as well as natural gas fields in Ohio and West Virginia. It not only operates 11,000 miles of pipeline but has 20 gas processing plants.
