December 7, 2015 / 12:16 PM / 3 years ago

UPDATE 3-Devon Energy to buy assets from Felix; sell some holdings

* Devon to buy Anadarko Basin assets for $1.9 bln

* To buy assets in Powder River Basin for $600 mln

* Devon’s pipeline unit to buy Tall Oak Midstream for $1.55 bln

* Devon marketing its stake in Access Pipeline in Canada

* Devon’s shares fall nearly 10 pct (Adds details from conference call, details; updates shares)

By Sneha Banerjee

Dec 7 (Reuters) - Oil producer Devon Energy Corp said it would buy some assets from Felix Energy LLC for $2.5 billion and raise $2 billion-$3 billion from asset sales, as the company reshapes its portfolio amid a slump in oil prices.

A more than 60 percent drop in global crude prices since June last year has prompted oil and gas companies to take a closer look at their assets. Producers are taking advantage of cheap prices to buy assets, while discarding unprofitable holdings.

Shares of Devon, whose pipeline unit EnLink Midstream is paying $1.55 billion for peer Tall Oak Midstream, fell nearly 10 percent in morning trading on Monday, tracking a steep fall in oil prices.

The broader Dow Jones Oil & Gas index was down about 4.7 percent, after oil prices plunged to near-seven year lows on OPEC’s decision to keep its output unchanged.

Analyst Subash Chandra of Guggenheim Securities LLC said Devon’s shares were also down because of the time gap in cash flows between the acquisition and the asset sales.

Devon said on Monday it had earmarked 50,000-80,000 barrels of oil equivalent per day (boepd) of production from non-core assets for sale through 2016.

The company is also looking to sell its 50 percent stake in Canada’s Access Pipeline system, which carries heavy oil across northeastern region of Alberta.

MEG Energy Corp, Devon’s equal partner in the pipeline, said in October it was looking to sell a part, or all, of its stake in the system.

Oklahoma-based Devon, which took a $6 billion impairment charge in its last-reported quarter, has also cut 15 percent of its Canadian workforce and its budget for 2016.

Devon said the deal with EnCap Investments’ Felix Energy was for 80,000 net acres and rights to as many as 10 prospective zones in the Anadarko Basin, which spans Oklahoma and Texas.

The company is also buying 253,000 net acres in the Powder River Basin. The oil-heavy assets are located south of Devon’s holdings in Wyoming and produce about 7,000 boepd.

Tall Oak Midstream, like Felix, has operations in Oklahoma.

Reuters reported talks between Devon and Felix last week.

Devon said it would fund the deal with $1.35 billion of equity and $1.15 billion of cash and debt.

Morgan Stanley & Co LLC was Devon’s financial adviser, while Tudor Pickering Holt & Co advised Felix. (Reporting by Sneha Banerjee; additional reporting by Darshana Sankararaman in Bengaluru; Writing by Swetha Gopinath; Editing by Shounak Dasgupta and Sriraj Kalluvila)

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