Oklahoma producers Devon, WPX merge with 400,000 acres in Delaware

Two Oklahoma-based shale producers, Devon Energy and WPX Energy, said this week they will combine in a $2.56 billion all-stock deal to create one of the nation’s largest producers with a dominant position in Delaware Basin. The “merger of equals” creates a combined company valued at about $12 billion to be named Devon Energy and headquartered in Oklahoma City. Andrew Dittmar, analyst at Enverus, told Oil & Gas Journal, “This deal represents the form of shale company consolidation that many across the industry have been looking for… The larger combined company will have the scale and efficiencies to navigate a challenging price environment and generate free cash flow for its investors.”
The combined company will hold 400,000 net acres in Delaware Basin with production of 277,000 barrels per day. About 35 percent of leases in Delaware Basin are on federal land. The combined company also has assets in Anadarko, Williston, Powder River and Eagle Ford basins. Devon shareholders will hold about 57 percent of the combined company after closing in 2021Q1.
Rick Muncrief, chairman and CEO of WPX, told Reuters Monday, “We’re building a company that has the capabilities to withstand all the headwinds, but can really prosper in better times.”