No. of Recommendations: 3
rnam,
Thanks for sharing some of the commentary on the acquisition today. I took advantage of the immediate price decline to buy more shares of DVN. I read this as a value accretive event as it directly addresses production growth, which has been hard for DVN as of late and has held back their valuation, without harming industry structure or adding supply overall. Deal seems fine near term in terms of cash resources and mitigating dilution, and assuming they have exercised the same value oriented discipline that led them to lose out on prior deals, they likely bought this asset with a margin of safety. Seems like a strong win to me, especially if they have a specific near term plan to bring down debt and share count. Pretty excited to see this deal happen. Now we just need to avoid falling into a recession that drops the price of oil.
