Devon Energy (DVN) has successfully closed its $5 billion purchase of Grayson Mill Energy. The deal, announced in July, solidifies its status as one of the largest oil and gas producers in the U.S. by expanding its presence in the Williston Basin.
DVN’s CEO, Rick Muncrief, highlighted the strategic fit between the two companies. He noted that the acquisition expands Devon’s operating scale and enhances production efficiency in the Williston Basin.
Devon Energy is an independent energy company that produces oil and natural gas.
Grayson Mill Deal Boosts Devon’s Production Capabilities
Importantly, the Grayson Mill acquisition provides several benefits to Devon Energy, especially bolstering its production capabilities. These include:
- Expanded Acreage: The additional 307,000 net acres provide opportunities for future drilling activities, increasing production potential.
- High-Quality Resources: Grayson Mill boasts 500 undrilled gross locations and 300 high-quality refrac candidates, ensuring a strong pipeline for future production growth.
- Enhanced Production Mix: Grayson Mill brings a high-margin production mix to Devon, further improving profitability.
It should be noted that Devon Energy plans to provide updated guidance for its 2024 production and capital spending plans during its third-quarter earnings release on November 5. These updates will offer more clarity on how the Grayson Mill Energy acquisition will influence Devon’s production targets and capital expenditure strategies moving forward.
Is DVN Stock a Good Buy?
Turning to Wall Street, DVN stock has a Moderate Buy consensus rating based on 11 Buys and eight Holds assigned in the last three months. At $55.88, the average Devon Energy price target implies 43.43% upside potential. Shares of the company have declined 22.08% in the past six months.
