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Devon Energy unveiled plans to take over privately held Eagle Ford Shale producer Validus Energy for $1.8 billion. The transaction would expand Devon’s footprint in the South Texas shale play by 42,000 net acres and tack on another 35,000 boe/d of output, which is expected to grow to 40,000 boe/d over the coming year. Devon said that 70% of Validus’ current production is oil. Validus, backed by Pontem Capital, acquired its Eagle Ford assets from Ovintiv in 2021 for $880 million. At the time, the properties produced 21,000 boe/d and oil prices were in the low $60 per barrel range. Investors responded favorably after Devon said increased cash flow from the deal would translate to a 10% boost in its outlook for its variable dividend and an acceleration of its $2 billion share buyback program. Devon’s stock had risen by more than 3% to over $59 per share by mid-morning. Devon’s purchase of Validus would be the largest deal in the Eagle Ford since Chesapeake’s $4 billion purchase of WildHorse Resource Development.

M&A, Corporate Strategy , Independent E&Ps, Shale
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