"Devon Energy Corp. (DVN) said Wednesday it is looking for a partner for five exploratory oil and gas projects in various states as it seeks to share costs and improve capital efficiency. Speaking to analysts in a conference call, executives of Oklahoma-based Devon said the company was looking at the possibility of establishing a joint venture agreement in the Tuscaloosa Marine Shale in Louisiana, the Mississippi Lime in Oklahoma, the Niobrara Shale in Wyoming, and the Utica Shale and the Michigan Basin in Ohio. Devon Executive Vice President Exploration and Production David Hager said a joint venture would allow the company to eliminate the large amount of money it has to invest acquiring acreage and redeploy that capital back into drilling or share repurchases. 'We have been conducting the data room. We've had outstanding interest from the companies who reviewed our acreage position,' Hager said. The joint venture structure is still open, but it is likely it will follow the arrangement of other agreements, which stipulate a large amount of cash to be paid up front, the company said. Devon is not looking for several partners but rather one that could be interested in developing all of the areas. Separately, Devon said it has continue to see higher oilfield service costs. The price for drilling rigs and other service have increased about 2% in the third-quarter compared to the previous quarter. Overall, the company expects a 10% to 12% increase of costs this year. 'We expect that we will see some pressure on costs primarily in the service sector as we go into 2012,' said Darryl Smette, Devon's executive vice president marketing and midstream. The Permian Basin in Texas is the area where Devon has seen the biggest increase in service costs, while prices have continued to grow fairly rapidly also in Canada, Smette said."
Source: Dow Jones