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%