OKLAHOMA CITY, July 08, 2024 (GLOBE NEWSWIRE) — Devon Power (NYSE: DVN) introduced in the present day it has entered right into a definitive buy settlement to accumulate the Williston Basin enterprise of Grayson Mill Power in a transaction valued at $5 billion, consisting of $3.25 billion of money and $1.75 billion of inventory to the sellers. The transaction is topic to customary phrases and situations, together with numerous buy worth changes, and is predicted to shut by the top of the third quarter of 2024, with an efficient date of June 1, 2024. “The acquisition of Grayson Mill is a wonderful strategic match for Devon that permits us to effectively develop our oil manufacturing and working scale whereas capturing a significant runway of extremely financial drilling stock,” said Rick Muncrief, Devon’s president and CEO. “This transaction additionally creates instant worth inside our monetary framework by delivering sustainable accretion to earnings and free money move that may lead to greater distributions to shareholders over time.” TRANSACTION HIGHLIGHTS Instantly accretive to monetary metrics – The transaction is straight away accretive to Devon’s key per-share monetary measures, together with earnings, money move, free money move and internet asset worth. The belongings have been acquired at lower than 4-times EBITDAX, with an estimated free money move yield of 15 p.c at an $80 WTI oil worth.Enhances scale and scope of operations – The acquisition provides a high-margin manufacturing combine that additional positions Devon as one of many largest oil producers within the U.S. Professional forma for the transaction, the corporate estimates its oil manufacturing to common 375,000 barrels per day, with whole manufacturing reaching a mean of 765,000 oil-equivalent barrels (Boe) per day throughout its diversified portfolio of belongings.(1)Transforms Williston Basin enterprise – The transaction considerably expands the corporate’s place within the Williston Basin with the addition of 307,000 internet acres (70 p.c working curiosity). Manufacturing from the acquired properties is predicted to be maintained at roughly 100,000 Boe per day (55 p.c oil) in 2025. With enhanced scale within the basin, Devon expects to comprehend as much as $50 million in common annual money move financial savings from working efficiencies and advertising and marketing synergies. The acquisition additionally provides 500 gross places and 300 high-quality refrac candidates that successfully compete for capital within the firm’s portfolio. On a professional forma foundation, Devon will possess a list lifetime of as much as 10 years within the Williston Basin at a continuing growth tempo of three operated rigs.Midstream possession enhances margin – The acquired enterprise generates peer-leading working margins within the Williston Basin that profit from midstream infrastructure possession in 950 miles of gathering programs, an intensive community of disposal wells and crude storage terminals. This midstream possession creates a margin uplift of greater than $125 million of EBITDAX yearly and offers advertising and marketing optionality to seize greater pricing via entry factors to a number of finish use markets.Improves outlook for return of capital to shareholders – Because of the accretive nature of this transaction to free money move, Devon’s board of administrators has expanded its share-repurchase authorization by 67 p.c to $5 billion via mid-year 2026. The corporate additionally expects this acquisition to be accretive to the corporate’s dividend payout in 2025 and past.Maintains robust monetary place – The transaction construction helps Devon retaining its robust investment-grade credit score rankings with a projected internet debt-to-EBITDAX ratio of roughly 1.0 occasions upon closing. The corporate plans to enhance its monetary power by allocating as much as 30 p.c of its annual free money move in the direction of lowering $2.5 billion of debt over the subsequent two years. (1) Professional forma manufacturing is a mix of Devon’s 2024 steering and Grayson Mill’s 2025e volumes of ~100 MBOED (~55% oil). FINANCING DETAILS Devon will fund the $5 billion acquisition with $3.25 billion of money and situation 37 million shares of frequent inventory valued at $1.75 billion. The corporate plans to finance the money portion of the acquisition worth via a mix of money readily available and debt. 2024 OUTLOOK Devon will present up to date forward-looking steering for 2024 upon closing of the transaction. ADVISORS Citi is serving as monetary advisor and Kirkland & Ellis LLP is serving as authorized advisor to Devon. CONFERENCE CALL WEBCAST AND ADDITIONAL MATERIALS Devon will host a convention name and webcast in the present day at 7:30 a.m. Central Time (8:30 a.m. Jap Time) to debate this announcement. The webcast and associated presentation supplies could also be accessed from Devon’s homepage at www.devonenergy.com. ABOUT DEVON ENERGY Devon Power is a number one oil and fuel producer within the U.S. with a premier multi-basin portfolio headlined by a world-class acreage place within the Delaware Basin. Devon’s disciplined cash-return enterprise mannequin is designed to realize robust returns, generate free money move and return capital to shareholders, whereas specializing in secure and sustainable operations. Devon Investor Contacts Scott Coody, 405-552-4735 Chris Carr, 405-228-2496 Devon Media Contact Brooke Baum, 405-552-3448 FORWARD LOOKING STATEMENTS This press launch comprises forward-looking statements inside the which means of the federal securities legal guidelines. Such statements are topic to a lot of assumptions, dangers and uncertainties, lots of that are past the management of the corporate. These dangers embrace, however aren’t restricted to: the delay or failure to consummate the transaction as a result of unhappy closing situations, corresponding to regulatory approvals, or different elements; the final word amount of money consideration to be paid or fairness consideration to be issued within the transaction as a result of buy worth changes or in any other case; the danger that, if acquired, the Grayson Mill Power enterprise doesn’t carry out in line with our expectations, together with with respect to future manufacturing or drilling stock; and the opposite dangers recognized within the Firm’s 2023 Annual Report on Kind 10-Okay and its different filings with the Securities and Change Fee (SEC). Traders are cautioned that any such statements aren’t ensures of future efficiency and that precise outcomes or developments might differ materially from these projected within the forward-looking statements. The forward-looking statements on this press launch are made as of the date hereof, and the corporate doesn’t undertake any obligation to replace the forward-looking statements on account of new data, future occasions or in any other case. NON-GAAP DISCLOSURES This press launch consists of non-GAAP (typically accepted accounting ideas) monetary measures, together with projections of the non-GAAP monetary measures of EBITDAX and free money move on an as-combined foundation. Because of the excessive variability and issue in making correct forecasts and projections of a number of the data excluded from these projected measures, along with a number of the parts of the calculations being inherently unpredictable, Devon is unable to quantify sure quantities that might be required to be included in probably the most straight comparable GAAP monetary measures with out unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP monetary measures is included. Such non-GAAP measures aren’t alternate options to GAAP measures, and you shouldn’t contemplate these non-GAAP measures in isolation or as an alternative choice to evaluation of outcomes as reported below GAAP. For added disclosure relating to Devon’s historic non-GAAP measures, together with how we outline such measures, please seek advice from Devon’s first-quarter 2024 earnings supplies and associated Kind 10-Q filed with the SEC. CAUTIONARY NOTE ON RESERVES AND RESOURCE ESTIMATES The SEC permits oil and fuel firms, of their filings with the SEC, to reveal solely proved, possible and attainable reserves. Any reserve estimates supplied on this press launch that aren’t particularly designated as being estimates of proved reserves might embrace estimated reserves or places not essentially calculated in accordance with, or contemplated by, the SEC’s newest reserve reporting tips. You’re urged to contemplate intently the oil and fuel disclosures within the Firm’s 2023 Annual Report on Kind 10-Okay and our different experiences and filings with the SEC.