Deals

Devon Energy Corp (DVN.N) said on Wednesday Japan's Sumitomo Corp (8053.T) will take a 30 percent stake in 650,000 shale acres Devon controls in the Permian Basin in a $1.4 billion deal.

This latest oil and gas deal signals continued strong demand for shale drilling know-how from foreign partners. In April, Devon closed a $2.5 billion shale joint venture with China's Sinopec.

Sumitomo will invest $340 million in cash upon closing and an additional $1.025 billion will be invested in Devon's drilling costs in the Cline and Midland-Wolfcamp shales.

The Oklahoma City company also reported a steep decline in second-quarter earnings, as lower oil and natural gas prices weighed in and year-ago results were boosted by a $2.5 billion gain from the sale of the company's Brazilian assets.

The company had a profit of $477 million, or $1.18 per share, compared with $2.7 billion, or $6.50 per share, in the same quarter a year ago.

Excluding items, Devon had a profit of 55 cents a share. Analysts on average had expected a profit of 81 cents per share, according to Thomson Reuters.

Devon said its oil and gas output was 679,000 barrels of oil equivalent per day, up 3 percent from a year ago.

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