Devon Energy plans Williston acquisition

US$5 billion deal for Grayson Mill Energy

Devon Energy plans to acquire the Williston Basin business of Grayson Mill Energy in a transaction valued at US$5 billion, consisting of US$3.25 billion of cash and US$1.75 billion of stock to the sellers.

Grayson Mill Energy is one the largest operators in the Williston Basin targeting the Bakken and Three Forks formations. The company operates 307,000 net acres across western North Dakota and eastern Montana with over 1,200 operated wells and ~900 miles of pipeline.

Devon Energy plans to acquire Grayson Mill Energy, a Houston-based exploration and production company focused on the acquisition and development of oil and gas assets with a focus on the Williston basin in North Dakota and Montana.

The company produced 120 net Mboepd in the 3rd quarter of 2023 and anticipates net production of ~125 Mboepd in 2024 with an active 3 rig and refrac program.

The company also owns and operates a significant midstream system to capture and transport oil, gas, produced water, and freshwater from its operations. The company has ~900 miles of pipeline, 24 interconnected SWD wells, and 6 crude storage terminals providing a throughput capacity of over 280,000 barrels of capacity. 

With enhanced scale in the basin, Devon expects to realize up to $50 million in average annual cash flow savings from operating efficiencies and marketing synergies. The acquisition also adds 500 gross locations and 300 high-quality refrac candidates that effectively compete for capital in the company’s portfolio. On a pro forma basis, Devon will possess an inventory life of up to 10 years in the Williston Basin at a constant development pace of three operated rigs.

“The acquisition of Grayson Mill is an excellent strategic fit for Devon that allows us to efficiently expand our oil production and operating scale while capturing a meaningful runway of highly economic drilling inventory,” said Rick Muncrief, Devon’s president and CEO.

The transaction is subject to customary terms and conditions, including various purchase price adjustments, and is expected to close by the end of the third quarter of 2024, with an effective date of June 1, 2024.

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