Shale producer Devon Energy to buy peer WPX Energy for $2.56 billion

[September 28, 2020]  (Reuters) - U.S. oil and gas producer Devon Energy Corp <DVN.N> will buy peer WPX Energy Inc <WPX.N> for $2.56 billion, the company said on Monday, as it looks to expand its presence in the Delaware portion of the Permian Basin across Texas and New Mexico.

The deal values WPX at $4.56 per share, just 2.7% higher than the stock's closing price on Friday.

Deals at little or no premium are becoming the norm in the oil and gas industry as producers seek out combinations to tide over a coronavirus-induced slump in demand and a crash in prices of hydrocarbons.

Devon's deal is the second major merger in the troubled oil and gas industry following the price shock in April when crude oil briefly traded in negative territory, and points to growing consolidation in the sector.

In July, Noble Energy Inc <NBL.O> agreed to be acquired by Chevron Corp <CVX.N> for $5 billion in stock.

Devon said it will own 57% of the combined company, which will have an enterprise value of around $12 billion, after the all-stock deal closes.

WPX shareholders will receive 0.5165 shares of Devon common stock for each share of WPX common stock owned.

Reuters first reported merger talks between the two on Saturday.

(Reporting by Shruti Sonal in Bengaluru; Editing by Maju Samuel and Saumyadeb Chakrabarty)

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