Devon Energy Corp said it would sell natural gas-rich assets onshore U.S. Gulf Coast, the Rockies and the mid-continent to Linn Energy for $2.3 billion to reduce debt and focus on more lucrative oil and natural gas liquids.
The company said it estimates to reduce its net debt by more than $4 billion this year with the completion of the deal, likely to happen by the end of the third quarter.
Devon has raised more than $5 billion from the sale of non-core assets in Canada and the United States over the past few months, helping the company reduce its debt.
Oil and natural gas liquids are expected to account for about 60 percent of Devon's output by year-end, Chief Executive John Richels said, adding that the company was targeting multi-year oil production growth of more than 20 percent.
The assets being sold to Linn produce 275 million cubic feet of gas equivalent per day, with 80 percent of the output being natural gas, Devon said.
Linn said it would finance the purchase by selling its Granite Wash assets spread over Texas Panhandle and western Oklahoma as well as other non-producing acreage.
Devon's shares were up 1 percent at $80.50 on the New York Stock Exchange. Linn's shares were up 1 percent at $32.26 on the Nasdaq.