2024-07-11 21:35:38 ET
Summary
- Devon Energy acquired Grayson Mill for $5b, adding 307,000 net acres in the Williston Basin and increasing daily production by 100Mboe/d, resulting in an expected 15% increase in FCF.
- Devon's strategic investments in operational efficiencies and new producing assets have led to improved well performance despite a -10% reduction in total capital investments.
- Management announced an improvement to shareholder benefits with a $5b share repurchase program and the potential for a dividend increase in 2025.
Devon Energy ( DVN ) announced a major $5b acquisition of Grayson Mill on July 8, 2024, that will add 307,000 net acres in the Williston Basin to Devon’s inventory and increase daily production by 100Mboe/d with a forecast of 765Mboe/d going forward throughout eFY24. The firm has performed exceptionally well in a sequentially down oil market on the back of a -10% reduction in total capital investments through improved well performance. Despite slightly lower average cash margins across most basins, Devon continues to invest in improving operational efficiencies and new producing assets. Given the firm’s growth path going forward, I reiterate my BUY recommendation for DVN shares, with a price target of $58/share at 5x eFY25 EV/EBITDAX....
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Devon Energy Deepens Their Williston Basin Assets With Grayson Mill Acquisition