Devon Doubles Eagle Ford Footprint in $1.8 Billion Buy

The Oklahoma City-based tight-oil producer has agreed to acquire Validus Energy.

Horizontal well completions amidst the brush in the Eagle Ford Shale of south Texas.
Source: Getty Images.

US independent Devon Energy is acquiring privately owned Eagle Ford Shale operator Validus Energy for $1.8 billion.

The companies said on 9 August that the all-cash deal involves 42,000 acres in the Eagle Ford where Denver-based Validus is producing on average 35,000 BOE/D (70% oil).

On a pro forma basis, Devon will operate 82,000 acres in the Eagle Ford with a current net production of 73,000 BOE/D (60% oil).

Additionally, the Oklahoma City-based Devon estimates it is gaining 350 drilling locations in the shale play’s oil window and that the Validus asset holds 150 “high-quality” refracturing candidates. Devon said it may boost production from its new property to 40,000 BOE/D by next year.

Validus took over the Eagle Ford holdings from fellow Denver-based producer Ovintiv Inc. in a deal struck in March 2021 for $880 million. Devon's purchase of the same assets for more than twice that figure comes as US merger and acquisition activity is considered to be tempered by high crude prices which have given sellers leverage to demand higher prices as well.

Devon added in its statement that the combination with Validus will create $50 million in annual savings through capital efficiencies, operations improvements, and marketing overlaps. The transaction is slated to close by the end of this quarter.

The deal to buy Validus follows Devon’s June acquisition of RimRock Oil and Gas for $865 million in cash. The purchase involved 38,000 acres in the Williston Basin, from which Devon said it would attempt to increase production to 20,000 BOE/D by next year.