Devon Energy Corp.'s winning bid for Dallas-based Chief Oil & Gas is among several high-priced U.S. asset acquisitions announced in the weeks preceding press time. Devon will pay Chief some $3.57 per thousand cubic feet equivalent (Mcfe) of proved Barnett Shale reserves. Devon is the No. 1 producer in the play, and sources believed a major oil company or another significant independent player in the Fort Worth Basin, such as XTO Energy Inc. or Chesapeake Energy Corp., would vie for taking the lead. It seems the assets are worth the most to Devon, which plans to further consolidate its hold on the play and has shut out other bidders. The Devon deal price is a fairly pure assessment, too: Crosstex Energy Inc. is paying $480 million for Chief's gas-gathering and other midstream assets in the Barnett play, so Devon is acquiring only the E&P assets. Altogether, the Chief package, marketed by Petrie Parkman & Co., has fetched some $2.7 billion. Original industry guesstimates were that the assets would go for around $2 billion, which was based on an average of roughly $3 per proved Mcfe. That was top of the market when the Chief exit was announced in early 2006. (For more details on this and several other recent M&A deals, see "Company Briefs" in this issue.) For more on this, see the June issue of Oil and Gas Investor. For a subscription, call 713-260-6441.
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