Devon Energy rallies on Sinopec shale deal

China oil conglomerate Sinopec and French oil producer Total SA on Tuesday inked separate deals worth more than $4 billion for U.S. shale acreage, as overseas firms tap into a boom in domestic production.

Sinopec /quotes/zigman/270945/quotes/nls/shi SHI +5.50% set plans to invest $2.2 billion for a one-third interest in five shale gas and oil fields owned by Devon Energy /quotes/zigman/204018/quotes/nls/dvn DVN +5.44% .

Shares of Devon jumped 6% after the deal was announced. Devon will remain the operator in the fields, located in the Utica Shale of Ohio as well as Mississippi, Louisiana, Michigan and Colorado.

“This arrangement improves Devon’s capital efficiency by recovering our land and drilling costs to date and by significantly reducing our future capital commitments,” said Devon CEO John Richels.

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- Posted: 2012-01-03 12:45:43

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