UBS Raises price Target as Devon Energy (DVN) Announces Midland Sales

UBS maintained a Sell rating on Devon Energy (NYSE: DVN), and raised the price target to $30.00 (from $29.00), after the company announced that it has agreed to sell its working interest in N. Midland Basin. The sale will go to PXD for $435MM, and is expected to close in the 3Q. DVN also decided to sell its S. Midland assets to an undisclosed buyer for $423MM.

Analyst William A. Featherston commented, "DVN agreed to sell its working interest in N. Midland Basin (15k net acres in Martin Co. & 13k in 8 surrounding counties) to PXD for $435MM. The w.i. only covers Wolfacmp B & D zones w/ 1 MBoed (70% oil) net prod'n. DVN also agreed to sell its S. Midland assets (22 MBoed prod'n, 33% oil) to an undisclosed buyer for a lower than expected $423MM. Both sales are expected to close in 3Q. The combined $858MM proceeds were below UBSe $1.1bn, bringing total '16 non-core E&P divestitures to ~$2.1bn. With a sale of its 50% stake in the Access Pipeline expected "within next several weeks," DVN expects total non-core asset sales to be at or above the top end of its $2-3bn guidance, implying its anticipated price of >$900MM for the Access stake."

For an analyst ratings summary and ratings history on Devon Energy click here. For more ratings news on Devon Energy click here.

Shares of Devon Energy closed at $35.09 yesterday.

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