OKLAHOMA CITY, June 16 (UPI) -- For nearly $1 billion, U.S. shale oil player Devon Energy said it sold some of its Texas assets in an effort to build output from core parts of its portfolio.
Devon said it sold off non-core assets in Texas to rival Pioneer Natural Resources Co. and one other undisclosed buyer for $858 million. Combined, it's part of a broader push to get rid of up to $3 billion in assets.
Dave Hagar, the company's president and CEO, said in a statement the proceeds will help with reinvestment strategies in other inland shale basins.
"With the success of our exploration and production asset sales, we are now in the planning stages to increase our upstream activity by approximately $200 million in the second half of this year," he said. "This additional activity will deliver production in early 2017 and beyond."
At a time when companies are spending less because of lower oil prices, Devon said the sale meant it could now up its spending program by about $200 million to up to $1.3 billion. Three more rigs would be added to its services, with deployments set for the Delaware basin and in other parts of the Oklahoma shale starting in the third quarter.
With that spending effort, Devon said it could produce about 7,000 barrels of oil equivalent more than expected to bring the full-year guidance to around 550,000 barrels of oil equivalent per day.
The sale comes as oil activity in the United States starts to recover along with crude oil prices. Though prices are still well below the $100 range common in 2014, the price for West Texas Intermediate, the U.S. benchmark price for crude oil, is 75 percent higher than its low point of below $30 per barrel for 2016.
Last week, oil services company Baker Hughes reported an increase in overall rig activity in the United States, one of the few such incidents of recovery so far this year.