Devon Energy leaving Houston – *Update2

Update:

Chronicle real estate reporter Nancy Sarnoff spoke to the owner of Devon Energy Tower, Brookfield Office Properties. That’s the downtown Houston building that  Devon Energy is vacating over the next several months.

Brookfield hasn’t decided how it will handle the building’s naming rights once Devon leaves, said Paul Frazier, senior vice president of Brookfield’s Houston region. The building could go back to being called Two Allen Center exclusively or the naming rights could be offered to another tenant, he said.

Devon has been an Allen Center tenant since 1999, when it bought PennzEnergy. At its peak, Devon leased about 880,000 square feet of space in the Allen Center. It now leases about 560,000 square feet.

Devon has been subleasing some of its space for several years, since it started selling off divisions of the company. It has about seven years left on its lease.

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Update:

All of Devon’s 500 Houston employees will either move to Oklahoma City or be given severance packages, a Devon spokesman says.  He said how many of those positions will be cut has not been determined.

However, employees in technical roles like engineers and geoscientists largely will be offered positions in Oklahoma City.

“We have administrative positions and employees in other service roles in Houston that we won’t be moving to Oklahoma City because those functions are duplicated and we don’t need the redundancy,” said Devon spokesman Chip Minty.

All employees who are not offered Oklahoma City positions or who choose not to move will be given severance packages.

Devon leases its offices in the Two Allen Center building, also known as Devon Energy Tower. In addition to Devon’s Texas assets, the Houston office oversees operations in the Tuscaloosa Marine Shale in Louisiana, the Utica Shale in Ohio and the A-1 Carbonate play in Michigan.

The company will continue to operate all of those assets and its Texas ones, but from the Oklahoma City office, Minty said.

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Original post:

Devon Energy is closing its office in downtown Houston and moving the jobs to its Oklahoma City headquarters, the company announced today.

The oil and natural gas exploration and production company said it is consolidating its United States workforce, including offices at 1200 Smith Street,  and moving operational oversight for its Texas and Louisiana assets to the Oklahoma office.  The move is expected to be complete by the end of the first quarter of 2013, the company said.

“Consolidating our U.S. operations will improve our ability to quickly shift the focus of our workforce between project areas as economic conditions dictate,” said Dave Hager, executive vice president of exploration and production. “In addition, this move will improve the sharing of best practices and enhance overall operational efficiency.”

The lower administrative expenses and personnel costs will help Devon save as much as $80 million annually, according to the company statement. The move will come at a one-time reorganization cost of $125 million. Of that, about $100 million will be recorded in the fourth quarter of 2012 and the rest in the first half of 2013.