Devon Energy’s sale of its Barnett Shale assets in North Texas was increased by $170 million under an amended contract with Banpu Kalnin Ventures.
Under the amended terms, Devon has agreed to sell its Barnett Shale assets to BKV for up to $830 million of total proceeds, consisting of $570 million in cash at closing and contingent payments of up to $260 million. The original sale announced in December 2019 was for $770 million.
With the amended terms, Devon will receive an increased deposit of $170 million from BKV, and the scheduled closing date for the transaction is extended from April 15, 2020 to Dec. 31, 2020. The closing payment is subject to customary purchase price adjustments that, among other things, allocate revenues and expenses based on a Sept. 1, 2019, effective date.
The agreement also provides for contingent cash payments of up to $260 million based upon future commodity prices, with upside participation beginning at either a $2.75 Henry Hub natural gas price or a $50 West Texas Intermediate oil price. The contingent payment period commences on Jan. 1, 2021 and has a term of four years. The contingent payments are earned and paid on an annual basis.
The transaction with Devon includes over 320,000 gross acres and 4,200 producing wells, making BKV the largest natural gas producer in the Barnett shale. This acquisition marks the BKV’s seventh major transaction and first position in the Barnett Shale play. BKV has invested or committed over $1.3 billion since its formation in 2015.
BKV is financially backed by its sole investor, Banpu Pcl, a Thailand-based coal mining and power-generation company with total assets of approximately $8 billion.
Source: Devon Energy