Devon Energy Corp DVN:NYSE

Last Price$67.92NYSE Previous Close - Last Trade as of 7:00PM ET 8/18/22

Today's Change+3.78(5.89%)
Bid (Size)$66.96 (1)
Ask (Size)$68.00 (1)
Day Low / High$65.00 - 67.98

Devon Energy's Acquisition of Williston Basin Assets Came at 'Attractive Price,' RBC Says

4:11PM ET 6/27/2022 MT Newswires
Devon Energy's (DVN) recent announcement to purchase the assets of RimRock Oil and Gas in the Williston Basin "came at an attractive price and is accretive to free cash flow per share," RBC Capital Markets said Monday.

The acquisition, which will add more than 100 undrilled inventory locations to the company's Williston Basin assets, "screens favorably on a price paid per flowing metric, and is accretive to all per share metrics owing to the all-cash deal financing," RBC said.

"We think DVN's scale and strength of balance sheet were competitive advantages to it being able to get the deal done at an attractive price and pay in all cash," the analysts noted. The company expects to close the deal at the end of July.

Devon also plans to increase its fixed dividend by 13% to $0.72 per share annualized, analysts wrote, adding that the company "values the optionality in the strategy with remaining FCF able to be deployed for buybacks or accretive M&A such as this when the right opportunity presents itself."

RBC estimates the company returning an 8% to 9% dividend yield this year, with buybacks adding another 3% to 4% to returns.

RBC updated its rating on the company's stock to sector perform with a price target at $70.

Price: 58.1, Change: +0.26, Percent Change: +0.45