UPDATE 3-Devon sells Alberta pipeline stake to CPPIB-backed company

Thu Jul 14, 2016 9:20am EDT
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* Sells Access pipeline stake to Wolf Midstream for $1.1 bln

* Completes divestiture plan with $3.2 bln in proceeds (Adds shares, details)

By Amrutha Gayathri

July 14 (Reuters) - Devon Energy Corp will sell its 50 percent stake in a pipeline in Western Canada for $1.1 billion to a midstream oil and gas company backed by the Canada Pension Plan Investment Board, completing its divestiture plan announced in December.

Shares of U.S.-based Devon rose 2 percent in premarket trading on Thursday.

"...Devon's divestiture program is now complete with proceeds totaling $3.2 billion, surpassing the top end of our $2 billion to $3 billion guidance range," Chief Executive Dave Hager said.

Oil prices are yet to fully recover from the slump last year, forcing companies in the sector to sell non-core assets to lower debt and finance new projects.

This has given investment companies, including CPPIB, a chance to buy assets at attractive valuations.

In the past month, CPPIB, which invests on behalf of Canada's national pension plan, has acquired assets from Canadian producers Penn West Petroleum Ltd and Paramount Resources Ltd through companies it holds stake in.   Continued...