In a relatively short time, Devon Energy Corporation (DVN -0.89%) has transformed itself. The company has gone through an extensive period of asset sales and shifted investments. Management has wisely positioned the exploration and production company to take advantage from some of the premier oil and gas fields in the United States, including the Eagle Ford shale and Permian Basin.

Devon is a company on the move. The most recent transaction is a $2.3 billion asset sale to upstream giant LINN Energy (LINEQ). This follows the broader strategy of divesting assets that aren't critical to the company's vision for the future.

The new Devon Energy is a much different company than it was just a few years ago. Here's why these developments are worth keeping an eye on, and the implications for investors going forward.

A major restructuring under way
First, earlier this year Devon closed on the sale of the majority of its Canadian assets to Canadian Natural Resources (CNQ -0.21%) for $2.8 billion. The sale involved a significant amount of assets with proved reserves totaling 170 million barrels of oil equivalents as of the end of last year. Immediately after the transaction closed, Devon stated its intention to repatriate the cash to the U.S. to repay the debt incurred from its earlier purchase of assets at the Eagle Ford shale. Last year, Devon acquired $6 billion worth of Eagle Ford assets from privately held GeoSouthern Energy.

These moves clearly benefited Devon, and it's reporting strong operating results. The company's disciplined focus on the highest-potential areas of the country is clearly paying off. Devon's domestic oil production soared more than 50% in the first quarter. And its operating cash flow jumped 41% year over year. Total production of oil, natural gas, and natural gas liquids stood at 691,000 barrels of oil equivalents per day in the first quarter, representing a 7% increase versus the same quarter the year before.

In turn, the company is rewarding shareholders as well. After its first-quarter results, Devon raised its dividend for the ninth time since 2004.

Asset upheaval now complete
Devon's portfolio transformation is now complete with the sale to LINN Energy. In all, Devon will sell the remainder of what it considers to be noncore assets in the United States to LINN for $2.3 billion. The assets include acreage across six states and involve about 900,000 net acres. Production capacity is pegged at about 275 million cubic feet of gas per day, and hold approximately 1.3 trillion cubic feet of proved reserves.

The deal makes sense for both sides. From Devon's point of view, it finalizes the long transition process put in place a few years ago. Devon has fulfilled its desire to focus on what it perceives to be the most attractive North American plays. Because of this, management expects liquids to hit 60% of its production mix by the end of the year. Over the long term, the company forecasts in excess of 20% growth in oil production. As a result, it's clear that these strategic initiatives should pave the way for strong growth for many years.

At the same time, LINN believes the assets being acquired have significant overlap with its current operations. This will allow for immediate synergies to take place and boost the company's production while keeping a lid on new development costs. The acreage involved fits well with LINN's core objectives, which are to produce steady resources from assets with low rates of decline. To that end, LINN is likely pleased that the Devon assets hold shallow decline rates of about 14%.

The Foolish conclusion
Devon Energy is truly a different company than it was just a short time ago. It's undergone a series of steps designed to focus on domestic oil and gas, as well as strengthen its balance sheet. Devon's latest move to sell U.S. assets it deems noncore to its future are the final step in that direction.

For LINN, the acquisition makes a lot of sense because the assets fit very well with its existing portfolio. The acquisition provides mature, long-life oil-and-natural-gas properties with low rates of decline and reduced capital intensity. These assets will nicely complement its existing production profile. As a result, the deal looks like a win for both sides.