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$5 Billion Grayson Mill Deal Expands Devon Energy's Williston Operations

Based in Oklahoma City, Devon Energy is expanding its operations in the Williston Basin with a major $5 billion acquisition of Grayson Mill Energy, a company supported by the Houston-based EnCap Investments LP. This deal includes $3.25 billion in cash and $1.75 billion in Devon stock. Announced before the markets opened on July 8, this strategic move aims to boost Devon's oil production and operational scale significantly.

With this acquisition, Devon will add an impressive 307,000 net acres to its Williston Basin holdings, where it already has a 70% working interest. This expansion is expected to bring Grayson Mill's production to an estimated 100,000 barrels of oil equivalent per day (boe/d) by 2025, with oil making up 55% of this production.

This deal not only increases Devon’s oil production to an average of 375,000 barrels per day but boosts its total production to about 765,000 boe/d. Additionally, owning Grayson Mill's extensive midstream infrastructure, which includes 950 miles of gathering systems and various storage and disposal facilities, is projected to add over $125 million to Devon's annual EBITDAX. This infrastructure ownership also enhances Devon's market access and pricing capabilities.

In response to the acquisition, Devon's board has also increased the company’s share repurchase authorization by 67%, extending it to $5 billion through mid-2026, reinforcing the company's commitment to shareholder value.

This acquisition comes at a time when the U.S. upstream oil and gas sector is seeing significant merger and acquisition activity. Devon had previously explored expansion opportunities in the Permian Basin with Endeavor Energy Resources and CrownRock LP, though these companies were later acquired by other major players for substantial sums.

The Williston Basin itself has been a hotbed for energy deals, demonstrated by Chord Energy’s recent $4 billion acquisition of Enerplus Corp., which positioned it as a leading producer in the region. Additionally, TXO Partners LP has entered the Williston scene with two new acquisitions.

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