As per the terms of the JV, Sumitomo has agreed to invest the amount to acquire 30% interest in Devon’s oil rich 650,000 net acres of Cline Shale and the Midland-Wolfcamp Shale projects located in the Texas, US .
Devon president and chief executive officer John Richels said, "These arrangements significantly improve the capital efficiency of our exploration programs which preserves cash flow for our deep inventory of development projects."
Sumitomo has paid $410m in cash on the closing of the deal, and will pay the remaining $980m to fund Devon’s capital requirement to drill its 70% interest in the projects.
Devon Energy will be the operator of the projects, and is expecting the drilling costs will be paid by mid-2014.
