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Devon Energy enters into marketing & midstream partnership

Oklahoma City, Devon Energy Corp said it will form a publicly-traded master limited partnership that will own a minority interest in Devon's U.S. onshore marketing and midstream business, which typically refers to pipelines and terminals. MLPs are popular with energy infrastructure and pipeline owners because the partnerships pay no corporate taxes and distribute nearly all their profits to investors. Devon's U.S. onshore marketing and midstream business includes natural gas gathering and processing assets located in Texas, Oklahoma, Wyoming and Montana. Devon expects to file with the United States Securities and Exchange Commission (SEC) a registration statement for the planned MLP in the third quarter of 2007. An offering of partnership units in the MLP will follow registration with the SEC. A Devon subsidiary will serve as the general partner of the MLP, and Devon expects to own a majority of the partnership units following completion of the initial public offering. Following the offering, Devon will continue to own a majority interest in its domestic onshore marketing and midstream business. Devon currently expects to utilize a significant portion of the proceeds from the sale of MLP units to retire debt of the parent company and to repurchase shares of its common stock. Any remaining proceeds would also be available to Devon for payment of dividends and other corporate purposes. Due to limitations imposed by U.S. securities laws, Devon will not be holding a conference call to discuss the content of this release. Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production and is included in the S&P 500 Index. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act of 1933, as amended. Due to limitations imposed by U.S. securities laws, Devon will not be holding a conference call to discuss the content of this release. Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production and is included in the S&P 500 Index.

 

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