NEW YORK ( The Deal) -- As part of its divestiture program to pay for a big acquisition, Oklahoma City oil and gas explorer Devon Energy ( DVN) said Wednesday it agreed to sell most of its Canadian conventional assets to Canadian Natural Resources Ltd. of Calgary, Alberta, for C$3.125 billion ($2.8 billion).
The properties had proved reserves of 170 million barrels equivalent at the end of last year. The sale doesn't include Devon's Horn River, Lloydminster and thermal heavy oil assets in Canada.
The transaction must clear Canadian regulators but is expected to close early in the second quarter. When it does, Devon expects to repatriate the proceeds to the United States to pay down debt taken on to finance its acquisition of Eagle Ford properties from Blackstone Group LP-backed GeoSouthern Energy Corp. in November for $6 billion.
Devon expects net proceeds of $2.7 billion after adjusting for currency exchange and taxes related to the sale and repatriation.
Devon said the divestiture process for its remaining non-core properties in the U.S. is "ongoing" and expects to complete it by year-end.
Devon CEO John Richels said in a statement that the agreement represents a significant step forward for its divestiture process. "This tax-efficient transaction provides for a clean exit from our Canadian conventional business at a value of nearly 7 times 2013 Ebitda, a substantial premium compared to Devon's current trading multiple," he said. "Furthermore, the timely execution of the largest piece of our non-core divestiture process accelerates the refocus on core assets."