Devon Energy to buy Grayson Mill's Williston Basin business in $5bn deal

8th Jul 2024 13:15

(Sharecast News) - Devon Energy said on Monday that it has agreed to buy the Williston Basin business of Grayson Mill Energy in a $5bn deal.

The transaction, which is expected to close in the third quarter, consists of $3.25bn in cash and $1.75bn in stock.

Devon Energy said the deal "significantly" expands its position in the Williston Basin with the addition of 307,000 net acres. Production from the acquired properties is expected to be maintained at about 100,000 barrels of oil equivalent per day in 2025.

With enhanced scale in the basin, Devon expects to realise up to $50m in average annual cash flow savings from operating efficiencies and marketing synergies.

In addition, the acquisition adds 500 gross locations and 300 high-quality refrac candidates that effectively compete for capital in the company's portfolio, it said.

Rick Muncrief, president and chief executive of Devon Energy, said: "The acquisition of Grayson Mill is an excellent strategic fit for Devon that allows us to efficiently expand our oil production and operating scale while capturing a meaningful runway of highly economic drilling inventory.

"This transaction also creates immediate value within our financial framework by delivering sustainable accretion to earnings and free cash flow that will result in higher distributions to shareholders over time."