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(Bloomberg) — Devon Energy Corp. agreed to acquire the Williston Basin business of Grayson Mill Energy for $5 billion as consolidation continues in the US oil patch.
The deal will significantly expand Oklahoma City-based Devon’s operations in the Bakken region that straddles North Dakota and Montana, giving Devon access to an additional 500 drilling locations across 300,000 acres. Company executives expect production from that land to reach about 100,000 barrels of oil per day in 2025, as they expressed optimism Monday to analysts and investors about the synergies Grayson Mill’s footprint provides for Devon.
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Devon will pay $3.25 billion in cash and $1.75 billion in stock for the assets in the Bakken, the company said in a statement Monday. Devon plans to finance the first portion with cash on hand and debt. The deal is expected to close by the end of the third quarter.
The acquisition is the latest in the US oil patch as shale basins age and companies push to line up future drilling sites so they can keep funding dividends and share buybacks.
Devon expects the Grayson Mill deal to boost its earnings enough that the board increased its share repurchase authorization by 67%, to $5 billion through mid-year 2026, according to the statement. Devon plans to update its 2024 guidance after the deal closes.
The company’s shares fell 0.8% in early trading in New York.
Citigroup was Devon’s financial adviser, and Kirkland & Ellis LLP was its legal adviser.
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