Devon Energy expands Williston Basin holdings with $5 billion acquisition


Oklahoma City’s Devon Energy just expanded its holdings in the Williston Basin and strengthened its position for at least the next ten years with a $5 billion acquisition of assets from Houston’s Grayson Mill Energy.

Devon announced Monday the acquisition, consisting of $3.25 billion in cash and $1.75 billion in stock to the sellers, included the addition of 307,000 net acres.


The announcement did not detail the location of the land in question, but the Williston Basin covers eastern Montana, western North Dakota, South Dakota and into Canada including southern Saskatchewan and southwestern Manitoba. It is also a basin that is divided by the Missouri River and extends 475 miles north and south and 300 miles east and west.


“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,” stated Rick Muncrief, Devon’s president and CEO.

“This transaction also creates immediate value within our financial framework by delivering sustainable accretion to earnings and free cash flow that will result in higher distributions to shareholders over time.”

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.


  • Immediately accretive to financial metrics – The transaction is immediately accretive to Devon’s key per-share financial measures, including earnings, cash flow, free cash flow and net asset value. The assets were acquired at less than 4-times EBITDAX, with an estimated free cash flow yield of 15 percent at an $80 WTI oil price.
  • Enhances scale and scope of operations – The acquisition adds a high-margin production mix that further positions Devon as one of the largest oil producers in the U.S. Pro forma for the transaction, the company estimates its oil production to average 375,000 barrels per day, with total production reaching an average of 765,000 oil-equivalent barrels (Boe) per day across its diversified portfolio of assets.(1)
  • Transforms Williston Basin business – The transaction significantly expands the company’s position in the Williston Basin with the addition of 307,000 net acres (70 percent working interest). Production from the acquired properties is expected to be maintained at approximately 100,000 Boe per day (55 percent oil) in 2025. 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.
  • Midstream ownership enhances margin – The acquired business generates peer-leading operating margins in the Williston Basin that benefit from midstream infrastructure ownership in 950 miles of gathering systems, an extensive network of disposal wells and crude storage terminals. This midstream ownership creates a margin uplift of more than $125 million of EBITDAX annually and provides marketing optionality to capture higher pricing through access points to multiple end use markets.
  • Improves outlook for return of capital to shareholders – Due to the accretive nature of this transaction to free cash flow, Devon’s board of directors has expanded its share-repurchase authorization by 67 percent to $5 billion through mid-year 2026. The company also expects this acquisition to be accretive to the company’s dividend payout in 2025 and beyond.
  • Maintains strong financial position – The transaction structure supports Devon retaining its strong investment-grade credit ratings with a projected net debt-to-EBITDAX ratio of approximately 1.0 times upon closing. The company plans to improve its financial strength by allocating up to 30 percent of its annual free cash flow towards reducing $2.5 billion of debt over the next two years.

Citi is serving as financial advisor and Kirkland & Ellis LLP is serving as legal advisor to Devon.