Devon Energy -- Williston Assets -- Update -- RBN Energy -- July 16, 2024

Locator: 48150DEVON.

Link here.

$5 billion.

100 Mboepd. $50,000 / flowing boepd.

307,000 Net acres. $16K / acre.

From RBN Bneergy today:

Devon Energy's and Grayson Mill Energy’s Holdings in the Williston

Figure 1. Devon Energy’s and Grayson Mill Energy’s Holdings in the Williston. Source: Devon Energy

Devon already has about 123,000 net acres in the Williston Basin (orange areas in Figure 1 above), mostly in North Dakota’s Dunn, McKenzie and Mountrail counties. Devon’s production there has recently been averaging about 50 Mboe/d, with 62% of its output in the form of oil. The E&P’s impending acquisition of GME will give Devon another 307,000 net acres in the play (dark-blue areas), mostly in North Dakota’s McKenzie, Mountrail and Williams counties (with some acreage just across the border in Montana) and triple Devon’s Williston production volumes to about 150 Mboe/d. Devon said the deal will also add 500 gross drilling locations and 300 high-quality refrac candidates and gives the acquiring company a roughly 10-year inventory in the play, assuming a constant development pace of three operated rigs. We should note that GME has been a pioneer in drilling three-mile laterals in the Williston — two miles had long been the norm — and had said prior to the deal that it expected 60% of the wells it drills in 2024 to run three miles horizontally.

More broadly, the GME acquisition is expected to increase Devon’s total 2025 production to about 775 Mboe/d, including 375 Mb/d of oil. With the deal, the Williston’s share of Devon’s total output will increase to nearly 20% from the current 9%.

In addition to acreage and production, the transaction will give Devon GME’s extensive collection of midstream infrastructure in the Williston, including freshwater distribution lines (blue lines in Figure 2 below), existing and planned crude oil gathering lines (solid and dashed green lines, respectively), gas gathering lines (red lines) and existing and planned produced-water gathering lines (solid and dashed purple lines, respectively) and disposal wells. The crude gathering systems can deliver oil to (among others) the Dakota Access Pipeline (DAPL) and the North Dakota Pipeline (NDPL).

Grayson Mill Energy’s Midstream Assets in the Williston

Figure 2. Grayson Mill Energy’s Midstream Assets in the Williston. Source: Devon Energy