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Sales reflect oil-and-gas company’s broader efforts to refocus its business
Newfield Exploration Co. has agreed to divest its Texas assets in two deals for a combined $390 million, reflecting the oil-and-gas company’s broader efforts to refocus its business.
Chairman and Chief Executive Lee K. Boothby said the move brings proceeds from asset sales since 2009 to roughly $3 billion. Proceeds from the latest deals will replenish the company’s cash balance and position it to step up plans in a part of Oklahoma known as the Stack.
The transactions, expected to close in the third quarter, include assets in the Eagle Ford Shale and conventional assets in south and west Texas.
Newfield said it is selling the Eagle Ford assets to Protege LLC. A deal for conventional assets in south Texas was with an undisclosed party.
The Stack, which stands for Sooner Trend, Anadarko basin and Canadian and Kingfisher counties, is an area where energy companies have been claiming solid returns. Those returns partly benefit from access to established pipeline, storage and other infrastructure, given the Stack’s proximity to Cushing, Okla., a major oil storage and trading hub.
Newfield already has shifted most of its activity to Oklahoma. The company on Tuesday raised its 2016 capital spending budget by $75 million to between $700 million and $750 million, with most of the increase targeted for assets in the Stack area that Newfield recently acquired from Chesapeake Energy Corp. The $470 million deal included roughly 42,000 net acres that complement Newfield’s position in Stack region.
Newfield’s shares, up 29% this year, rose 1% to $42.02 in early trading.