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Acquisitions And Divestitures
 9 Months Ended
Sep. 30, 2015
Acquisitions And Divestitures [Abstract]  
Acquisitions And Divestitures

2.    Acquisitions and Divestitures

 

Acquisition of GeoSouthern and Formation of EnLink 

 

    On February 28, 2014, Devon completed its acquisition of interests in certain affiliates of GeoSouthern Energy Corporation (“GeoSouthern”). On March 7, 2014, Devon, Crosstex Energy, Inc. and Crosstex Energy, LP (together with Crosstex Energy, Inc., “Crosstex”) completed a business combination to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business. The new business consists of EnLink Midstream, LLC (the “General Partner”) and EnLink Midstream Partners, LP (“EnLink”), which are both controlled by Devon and are publicly traded entities. 

 

The following unaudited pro forma financial information was prepared assuming both the GeoSouthern acquisition and the formation of EnLink and the General Partner occurred on January 1, 2014. The pro forma information has been included for comparative purposes only and is not intended to reflect the actual results of operations that would have occurred if the business combination and acquisition had been completed at the date indicated. In addition, it does not project Devon’s results of operations for any future period.

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2014

 

 

 

 

 

 

 

 

(Millions)

 

Total operating revenues

 

$
14,218 

 

 

 

 

 

 

Net earnings

 

$
2,109 

 

Noncontrolling interests

 

$
68 

 

Net earnings attributable to Devon

 

$
2,041 

 

Net earnings per common share attributable to Devon

 

$
4.98 

 

 

EnLink Acquisitions

 

    The following table presents a summary of EnLink’s acquisition activity for the first nine months of 2015.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase Price
(Millions)

 

Allocation
(Millions)

Date

 

Acquiree

 

Cash

 

EnLink Units

 

PP&E

 

Goodwill

 

Intangibles

 

Other

January 31

 

LPC Crude Oil Marketing LLC

 

$108

 

-

 

$30

 

$30

 

$43

 

$5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 16

 

Coronado Midstream Holdings LLC ("Coronado")

 

$240

 

$360

 

$302

 

$18

 

$281

 

$(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    On October 1, 2015, EnLink acquired Delaware Basin natural gas gathering and processing assets from MRC Energy Company (“Matador”) for approximately $143 million, subject to certain adjustments.

 

EnLink Dropdowns

 

    In February 2015, EnLink acquired a 25% equity interest in EnLink Midstream Holdings, LP (“EMH”) from the General Partner in exchange for units valued at approximately $925 million. In May 2015, EnLink acquired the remaining 25% equity interest in EMH from the General Partner in exchange for units valued at approximately $900 million.

 

In April 2015, EnLink acquired the Victoria Express Pipeline and related truck terminal and storage assets (“VEX”) from Devon for approximately $180 million in cash and equity, subject to certain adjustments. EnLink also assumed approximately $35 million in certain future construction costs to expand the system to full capacity.

 

Asset Divestitures

 

    In the second quarter of 2014, Devon sold Canadian conventional assets for $2.8 billion ($3.125 billion Canadian dollars) and recognized a gain totaling $1.1 billion ($0.6 billion after-tax).  This gain is included as a separate item in the accompanying consolidated comprehensive statements of earnings. Included in the gain calculation were asset retirement obligations of approximately $700 million assumed by the purchaser as well as the derecognition of approximately $700 million of goodwill allocated to the sold assets. In conjunction with the divestiture, Devon repatriated approximately $2.8 billion of proceeds to the U.S. in the second quarter of 2014, which was utilized to repay commercial paper and term loan balances. Between collecting the divestiture proceeds and repatriating funds to the U.S., Devon recognized an $84 million foreign currency exchange loss and a $29 million foreign currency derivative loss. These losses are included in other nonoperating items in the accompanying consolidated comprehensive statements of earnings.

 

    In the third quarter of 2014, Devon sold certain U.S. assets for $2.2 billion. Additionally, approximately $200 million of asset retirement obligations were assumed by the purchaser. No gain or loss was recognized on the sale.