Through the deal, Devon Energy will gain an acreage of 42,000 net acres located near the company’s existing leasehold in the Eagle Ford Formation, while adding 35,000 barrels of oil equivalent per day of production

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Validus Energy to be acquired by Devon Energy. (Credit: Anita starzycka from Pixabay)

Devon Energy, a publicly-listed American oil and gas company, has agreed to acquire Validus Energy, an operator in the Eagle Ford Shale in the US, in an all-cash deal worth $1.8bn.

Based in Denver, Validus Energy is backed by Pontem Energy Capital (PEC) and other private investors and institutions.

Through the deal, Devon Energy will gain an acreage of 42,000 net acres, of which 90% is working interest. The acreage is located near the company’s existing leasehold in the Eagle Ford Formation.

Presently, the production of Validus Energy is around 35,000 barrels of oil equivalent per day (Boed), of which, 70% is oil. The production volumes are anticipated to move up to an average of 40,000Boepd over the next year, said Devon Energy.

The deal also provides 350 repeatable drilling locations for Devon Energy in the core of the Karnes Trough oil window in addition to 150 “high-quality” refrac candidates.

Devon Energy president and CEO Rick Muncrief said: “The Validus acquisition captures a top-tier oil resource with a meaningful runway of highly economic inventory that is complementary to our existing footprint in the Eagle Ford.

“This accretive transaction also enhances our financially-driven strategy that is designed to deliver per-share financial growth and accelerate the return of capital to our shareholders.”

Following the acquisition, Devon Energy will increase its net acreage in the Eagle Ford Shale to 82,000 net acres and its oil mix from 49% to 60%. The pro forma production in the region in Q2 2022 of the enlarged company is 73,000Boed.

The deal, which is subject to the usual terms and conditions, is anticipated to be wrapped up by the end of Q3 2022.

Last month, Devon Energy closed the previously announced $865m acquisition of the leasehold interest and associated assets of RimRock Oil and Gas in the Williston Basin in the US.