Devon Energy's board approves plans for MLP Spinoff
BY TESS STYNES
OKLAHOMA CITY -- Devon Energy’s board approved the independent oil and gas producer's proposed formation of a publicly traded midstream company, joining a long line of energy firms that have formed master limited partnerships.
Shares were up 2.9% at $58.27 in recent premarket trading. The stock is down 5.7% this year.
Devon had indicated it was considering the move earlier this year. It had looked into doing so in 2007, but backed off when the financials started deteriorating.
The MLP is expected to initially own a minority interest in Devon's U.S. midstream business, which includes natural gas gathering and processing assets located in Texas, Oklahoma, and Wyoming.
Devon will own the general partner of the MLP, all of its incentive distribution rights, and a majority of its common units following completion of the initial public offering. The company plans to use proceeds from the initial public offering to fund its continuing operations.
Devon said it expects to file its plans with the U.S. Securities and Exchange Commission during the third quarter.
Devon last month reported that it swung to a substantial first-quarter loss as the company recorded a $1.9 billion write-down stemming from lower oil and natural-gas liquids prices.
Dow Jones Newswires