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UPDATE: U.S.-based Devon Energy says it intends to exit Canadian oilsands sector

Last Updated Feb 20, 2019 at 3:47 pm MST

The Devon Energy Corp. is seen in this undated handout photo. Another foreign oil company is getting out of the Canadian oilsands industry. Oklahoma City-based Devon Energy Corp. says it will pursue the "separation" of its Canadian assets from its core business, a move that could include their outright sale or creation of a new company to own and operate them. THE CANADIAN PRESS/HO, Devon Energy Corp. *MANDATORY CREDIT*

CALGARY — Another foreign oil company says it’s getting out of the Canadian oilsands.

Oklahoma City-based Devon Energy Corp. says it will pursue the “separation” of its Canadian assets from its core business, a move that could include an outright sale or creation of a new company to own and operate them.

Devon owns the Jackfish steam-driven oilsands complex, with a capacity of 105,000 barrels per day of bitumen.

They also own conventional heavy oil wells near Lloydminster, Alta., that produce about 15,000 barrels per day.

Other foreign companies that have reduced their exposure to the oilsands in recent years include Norway’s Statoil, Arkansas-based Murphy Oil, France’s Total SA and Houston-based ConocoPhillips.

In research notes, CIBC analyst Jon Morrison says the Canadian assets would likely fetch between $3.5 billion and $5 billion if sold, while Eight Capital analyst Phil Skolnick estimates they could sell for between $7 billion and $9 billion.

Jackfish is south of Fort McMurray near similar operations owned by Calgary-based rivals Cenovus Energy Inc. and MEG Energy Corp.

Devon says it is making the move to exit Canada (as well as from the Barnett Shale area in Texas) so that it can complete its “transformation to a high-return U.S. oil growth business.”

 

Companies mentioned in this article: (TSX:CVE, TSX:MEG)