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Devon Energy Corp. buying Canadian natural gas firm

SHARE Devon Energy Corp. buying Canadian natural gas firm

NEW YORK — Devon Energy Corp. is buying Canadian natural-gas producer Anderson Exploration Ltd. for about $3.4 billion in cash, creating the nation's largest oil-and-gas production company.

Devon will acquire estimated proved reserves of 532 million barrels of oil equivalent and approximately 8 million undeveloped acres, allowing it to stake out a long-term position in the natural gas fields of the Canadian Arctic, the company said early Tuesday.

"Expanding our presence in Canada has been an important objective for Devon," said J. Larry Nichols, Devon's chairman, president and chief executive. "Anderson was at the top of our list of acquisition opportunities."

The purchase would increase Devon's proven reserves to about 2 billion barrels of oil equivalent, with 87 percent of those located in North America. In addition, North American natural gas production would increase from 1.6 billion cubic feet per day to 2.2 billion cubic feet per day.

Devon is paying a 51 percent premium for the shares of the Calgary, Alberta-headquartered Anderson based on the its closing price of $17.07, down 13 cents, in Friday trading on the New York Stock Exchange. Devon shares were down 72 cents to $46.27, also on the NYSE.

Devon is also assuming $1.2 billion in Anderson's debt.

Anderson's operations will be merged with Devon's Canadian operations. The deal, expected to close by the end of the year, is subject to shareholder and regulatory approval.