Devon Eyeing Permian Basin Acquisition?

Devon Energy Corporation may not be finished acquiring oil and natural gas assets. According to a recent published report by Natural Gas Intelligence, the Oklahoma City-based exploration and production company along with Chevron Corp. and ConocoPhillips may be interested in acquiring a portion of Royal Dutch Shell PLC’s Permian Basin portfolio, estimated to be worth nearly $10 billion.

Shell executives and Devon CEO Rick Muncrief have not commented about the possibility of a Permian sale.

“We’ve got a tremendous inventory, a tremendous business,” Muncrief recently told investors. Regardless of what may transpire on the acquisitions front, “we have set a very, very high bar and we will be very disciplined in whatever we do.”

The company improved synergies and reduced overhead, creating efficiencies resulting in a 9% reduction in capital spending. Devon is focused on production in the Permian Delaware area, where output climbed 22% year over year.

The company averaged 15 operating rigs and five completion crews across the Lower 48 plays. Capital spending totaled $509 million, 9% under guidance.

The growth in production was driven by the Permian Delaware. Of the 75 gross wells spud during the latest quarter, 55 were in the Delaware sub-basin. Devon also has substantial leaseholds in the Eagle Ford Shale and the Anadarko, Powder River and Williston basins.

In the Anadarko basin, Devon continues to partner with Dow Inc. on a $100 million joint venture project. Sixteen wells were spud in the first half of 2021 with plans to drill up to 30 more wells this year.

 

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