/quality/85/?url=http://media.beam.usnews.com/78/2867860b75a1e0cd08f2243c850958/tag:reuters.com,2020:newsml_LYNXMPEG8R0ZS:12020-09-28T111709Z_1_LYNXMPEG8R0ZS_RTROPTP_3_USA-ENERGY.JPG">

By Shruti Sonal and David French

(Reuters) – U.S. oil and gas producer Devon Energy Corp

said on Monday it will buy shale-oil rival WPX Energy Inc

for $2.56 billion as it looks to boost its presence in the top U.S. oilfield.

The all-stock deal comes as U.S. shale companies have posted big losses on weak crude prices amid the COVID-19 pandemic and have struggled to raise new capital to restructure debt.

But as producers seek out combinations to survive the coronavirus-induced slump in demand, deals at little or no premium are becoming the norm.

“This cycle was driven by COVID, but you never know when the next cycle will happen, so we’re building a combined company that has the capabilities to withstand all the headwinds but can really prosper in better times,” Rick Muncrief, chief executive of WPX, told Reuters.

Investors cheered the deal: WPX shares closed up 16.4%

Read More

Oil prices have come under pressure again, and the outlook isn’t looking great. But Devon Energy (NYSE:DVN) can still generate free cash flows with oil currently trading slightly below $40 per barrel. The company also benefits from having a solid hedge book and has the flexibility to cut its capital budget if the business remains challenging. Devon Energy, however, has above-average levels of debt, which makes it a higher beta play than some other shale drillers. But I think with a favorable debt maturity profile and strong liquidity, including more than $1.6 billion of cash reserves, the Oklahoma City-based oil producer can withstand the downturn.

Image courtesy of Pixabay

The US oil prices averaged just $28 per barrel in the second quarter, which was arguably the most difficult period many oil producers have ever faced, but stabilized in the $40-$42 a barrel range in the subsequent months as oil demand

Read More

U.S. shale producer Devon Energy Corp is in talks to acquire rival WPX Energy Inc in an all-stock transaction that would create a company worth around $6 billion, people familiar with the matter said on Saturday.

The deal talks show how consolidation in the oil and gas industry is picking up, as low energy prices drive some independent producers to seek scale through mergers. In July, Noble Energy Inc agreed to be acquired by Chevron Corp for $5 billion in stock.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

The deal, which would value Tulsa, Oklahoma-based WPX at a small premium to its current share price, could be announced as soon as next week, according to one of the sources.

The sources, who requested anonymity to discuss the private talks, cautioned that an agreement was not

Read More
/quality/85/?url=http://media.beam.usnews.com/1e/983cb11450286ace31fa1fb08a6db8/tag:reuters.com,2020:newsml_LYNXMPEG8P0MH:12020-09-26T214638Z_1_LYNXMPEG8P0MH_RTROPTP_3_USA-FRACKING.JPG">

NEW YORK (Reuters) – U.S. shale producer Devon Energy Corp is in talks to acquire rival WPX Energy Inc in an all-stock transaction that would create a company worth around $6 billion, people familiar with the matter said on Saturday.

The deal talks show how consolidation in the oil and gas industry is picking up, as low energy prices drive some independent producers to seek scale through mergers. In July, Noble Energy Inc agreed to be acquired by Chevron Corp for $5 billion in stock.

The deal, which would value Tulsa, Oklahoma-based WPX at a small premium to its current share price, could be announced as soon as next week, according to one of the sources.

The sources, who requested anonymity to discuss the private talks, cautioned that an agreement was not guaranteed.

Devon and WPX did not immediately respond to requests for comment.

Buffered by reduced demand for hydrocarbons

Read More