Denver-based Kalnin Ventures said that its affiliate, BKV Oil and Gas Capital Partners, has struck a $770 million deal to buy Devon Energy Corp.’s assets in the Barnett Shale in Texas.
The expected closing date on the transaction announced Tuesday is 2020.
Kalnin Ventures said in a statement that the agreement with Oklahoma City-based Devon Energy will make BKV the largest natural gas producer in the Barnett Shale. The deal includes more than 320,000 gross acres and 4,200 producing wells.
Net production from the Barnett Shale properties averaged 597 million cubic feet equivalent per day in the third quarter of 2019, according to Kalnin. At the end of 2018, proved reserves associated with the properties amounted to approximately 4 trillion cubic feet equivalent, the company said.
“Devon has done wonderful work in the Barnett Shale and we look forward to continuing that tradition, delivering high-quality returns for many years to come,” Christopher Kalnin, CEO of BKV, said in a statement.
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.
Dave Hager, Devon Energy’s president and CEO, said in a statement that the Barnett Shale has been a cornerstone for the company during 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,” Hager said.
Besides the agreement with BKV, Devon announced that its board of directors authorized a new $1 billion share-repurchase program, bringing the total repurchase authorization to $6 billion. The company said in a statement that $800 million of the $1 billion authorization is conditioned upon the closing of the Barnett transaction.
“With a significant number of U.S. producers pivoting away from gas, it has opened a market opportunity for private capital and international companies to step in and opportunistically acquire assets,” Andrew Dittmar, senior mergers and acquisitions analyst of market research at Enverus, said in an email. “In many cases, these are legacy positions like Devon’s Barnett leasehold that have seen significant investment in the past and so have high established production and cash flow.”
