March 12, 2010 (FinancialWire) — Devon Energy Corp. (NYSE: DVN) said that it has entered into agreements to sell all of its assets in the deepwater Gulf of Mexico, Brazil and Azerbaijan to BP (NYSE: BP) for $7 billion.

In addition, according to Devon, BP will assume Devon’s leases of the Seadrill West Sirius and Transocean Deepwater Discovery drilling rigs for the duration of the contract terms.

The company also said that Devon and BP will form a heavy oil joint venture to develop BP’s Kirby oil sands leases in Alberta, Canada.

Devon said it expects closings on the various assets to occur at different times before year-end.

In order to facilitate the oil sands joint venture, Devon said it will acquire 50 percent of BP’s interest in the Kirby oil sands leases. Devon will pay BP $500 million at closing and commit to fund an additional $150 million of capital costs on BP’s behalf.

Devon will be the operator of the Kirby project, which lies in close proximity to Devon’s Jackfish steam-assisted gravity drainage project. Devon and BP also agreed to negotiate a long-term heavy crude sales agreement for Devon’s share of Kirby production.

On November 16, 2009, Devon released plans to divest its Gulf of Mexico and international assets to allow the company to focus on its North American onshore assets. The divestiture proceeds will be allocated between the acceleration of development of Devon’s North American onshore properties and debt reduction.

Oklahoma-based Devon Energy is an independent energy company engaged in oil and gas exploration and production.

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