Devon Energy plans to acquire Williston

$5 billion deal for Grayson Mill Energy

Devon Energy plans to acquire Grayson Mill Energy’s Williston Basin operations in a deal valued at $5 billion, including $3.25 billion in cash and $1.75 billion in stock to the sellers.

Grayson Mill Energy is one of the largest operators in the Williston Basin, focusing on the Bakken and Three Forks formations. The company operates 307,000 net acres in western North Dakota and eastern Montana, with over 1,200 wells operated 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 resources, with a focus on the Williston Basin in North Dakota and Montana.

The Company produced 120 Mboepd net in Q3 2023 and is targeting net production of ~125 Mboepd in 2024 driven by an active 3-rig and refractor program.

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

With the increased scale in the basin, Devon expects to realize average annual cash flow savings of up to $50 million through operational efficiencies and marketing synergies. The acquisition also adds 500 gross prospects and 300 high-quality refractories that are competing effectively for capital to the company’s portfolio. On a pro forma basis, Devon will have a 10-year life of reserves in the Williston basin with a steady growth rate of three serviced rigs.

“The acquisition of Grayson Mill is an excellent strategic fit for Devon, allowing us to efficiently expand our oil production and scale while gaining significant resources of highly cost-effective drilling assets,” said Rick Muncrief, Devon’s president and CEO.

The transaction is subject to customary 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.