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Devon Energy in talks with WPX Energy for merger

Miguel A. Rodriguez
Miguel A. Rodriguez
28 September 2020
A new potential merger is in sight in the US energy sector

A #merger could take shape in the US energy sector. According to people familiar with the matter, Devon Energy Corp is looking to acquire one of its rivals, WPX Energy Inc.

Allegedly, the two companies are considering an all-stock deal, which, if it goes through, could create a company with a market value of $6 billion. Despite this being an opportunity to bring together two medium companies, experts believe it is a result of the #pandemic on top of the difficulties that #shale companies already have encountered over the years, most of them being from investors delivering consistent profits and cash flow. 

Both Devon and WPX have dropped significantly in value in the past year – 64% and 57%, respectively. Also, the companies’ market cap dove in the past years. Devon reached its peak in 2008 when it was worth over $50 billion, while now its market cap sits at $3.4 billion. At the same time, WPX is now worth around $2.5 billion from its peak of $8 billion two years ago. 

If everything goes according to plan, the deal could be officially announced later this week. Devon closed the week 1.56% lower, but during today's pre-market session, it gained 0.91%.

The news seems to be like a breath of fresh air for WPX, as today it surged more than 22%. 


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.