Devon Is Coming To The Bakken -- June 8, 2022

Updates

July 21, 2022: deal closes.

Original Post

Devon is tracked here. 

Dividends: it is hard to figure out what the "regular fixed dividend" is but it appears to be 34 cents.

DVN:

• today: closed down slightly during the day; trading at $78
  
• down minimally after hours, after announcement
• P/E = 14
• market cap = $52 billion
• pays 6.52% 
• pays a regular fixed and a variable dividend
• dividend history here; from 9 cents two years ago to $1.27 now which will be increased. In the chart below, I assume both "fixed" and "variable" dividend included.
  

Breaking: Devon is coming to North Dakota. Lynn Helms said this back in 2011 and the blog caught it! Whoo-hoo! Actually caught it twice, see below. Press release here.

Devon presentation here.

Map here:

From an earlier post on the blog:

• July 25, 2021: buyout offer? 
• private equity firm Warburg Pincus asked for indicative acquisition offers for a deal that could exceed $500 million

Put this in context with NOG's announcement of a Bakken bolt-on addition yesterday.

• buyer: Devon
• seller: RimRock Oil and Gas LP
• deal:
• 38,000 net acres in the Williston Basin / Bakken
• $865 million
• back of envelope, $/acre:
• $865 million / 38,000 net acres = $23,000 / net acre
• production: RimRock’s first-quarter production was approximately 15,000 Boe per day (78% oil), with volumes expected to increase to an average of 20,000 Boe per day over the next year.
• back of the envelope, $/flowing boepd:
• $865 million / 15,000 boepd = $60,000 peer flowing boepd
• almost identical to the NOG acquisition linked above
  

Reuter's link here.

Devon will approve a 13% increase to the fixed quarterly dividend following the closing of the deal. The company also expects this transaction to be accretive to the variable dividend payout in 2022 and beyond.

RimRock is tracked here. The last update:

RimRock Oil & Gas

• July 25, 2021: buyout offer? 
• private equity firm Warburg Pincus asked for indicative acquisition offers for a deal that could exceeed $500 million
• June 6, 2019: makes fifth acquisition in Divide County; 120,000 net acres
• March 19, 2018: list of 27 more wells transferred from Whiting to Rimrock Oil & Gas;
• February 12, 2018: list of 101 wells transferred from Whiting to Rimrock Oil & Gas
• these are some very nice Whiting wells that were first permitted/drilled by KOG, Dunn County
• RimRock natural gas gathering system, Fort Berthold/Dunn County  -- January 26, 2018
• buys Whiting assets in Fort Berthold Indian Reservation -- September, 2017
• first noted in 2016 / 2017 -- took over some QEP wells; website;