Devon Energy, WPX Energy reportedly exploring potential merger

Devon Energy, an Oklahoma-based onshore oil and gas producer, is in discussions to acquire WPX Energy in an all-stock deal to create a company worth about $6 billion, reported Reuters citing people familiar with the matter.

Reuters reported that the transaction values WPX Energy at a small premium compared to its current share price of $4.4. The deal is expected to be officially revealed early next week as per a source.

WPX Energy is an Oklahoma-based natural gas liquids company, which had completed a $2.5 billion acquisition in June 2020 of Delaware Basin operator Felix Energy. (WPX Energy acquisition of Felix Energy)

The company has core positions in the Permian and Williston basins. Apart from Felix Energy, WPX Energy had acquired RKI Exploration & Production and Panther Energy to build its Permian Basin position. WPX Energy had also formed a midstream joint venture with Howard Energy Partners.

The company’s production is made up of nearly 80% oil or liquids and 20% natural gas.

In July 2020, WPX Energy reported a second-quarter loss of $414 million, or a loss of $0.74 per share on a diluted basis.

On the other hand, Devon Energy produces nearly 140,000 barrels of oil per day, approximately 575 million cubic feet of natural gas a day, and around 80,000 barrels of natural gas liquids per day.

The company has operations in the Delaware Basin, Powder River Basin, Eagle Ford, and Anadarko Basin.

In August 2020, Devon Energy reported a net loss of $670 million, or $1.78 per diluted share, in Q2 2020.

The company, in December 2019, announced the sale of its assets in the Barnett Shale to Banpu Kalnin Ventures (BKV) for a price of $770 million. In April 2020, the terms of the deal were amended under which Devon Energy will be paid up to $830 million of total proceeds, made up of $570 million in cash at closing and up to $260 million in contingent payments.