U.S. oil and gas producer Devon Energy Corp said on Monday it will buy Permian basin peer WPX Energy Inc for $2.56 billion as it looks to scale up its presence in the Delaware portion of the prolific shale field.
Devon said the deal, which is expected to close in the first quarter of 2021, will help cut costs and improve its annual cash flow by $575 million by end of next year.
Tudor, Pickering and Holt analysts said the deal creates material scale in the Delaware while significantly cutting costs. Devon said the combined company will hold an acreage position of 400,000 net acres in the Delaware and will have a capacity of producing 277,000 barrels of oil per day.WPX shareholders will receive 0.5165 shares of Devon common stock for each share of WPX common stock owned.
Devon Chief Executive Officer Dave Hager will serve as the executive chairman of the combined firm, while WPX’s chairman Rick Muncrief will be its president and CEO.Reporting by Shruti Sonal in Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur
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