Devon Agrees to $4.2 Billion Asset Sale Amid Pressure to Explore Company Sale
Key Facts
Devon Energy announced an agreement on October 8 to sell its Eagle Ford assets to Crescent Energy for $4.2 billion in cash, amid shareholder calls to sell assets or explore a sale of the company itself. The company said in its statement that the cash consideration is subject to customary closing adjustments and that it intends to use the after-tax proceeds for share buybacks and debt reduction. The deal includes about 90,000 net acres in Karnes, DeWitt and Gonzales counties in Texas, as part of a reshaping of Devon's asset portfolio. The assets covered by the agreement account for about 4% of the company's total oil-equivalent production, according to the statement. Chief Executive Clay Gaspar said the sale focuses the portfolio on "higher-return, longer-life assets."
The shareholder campaign preceded the announcement of the Eagle Ford agreement, with Reuters reporting in June, citing people familiar with the matter, that Toms Capital was pressing Devon to accelerate asset sales or put the company itself up for sale. The news agency cited the Financial Times as reporting that the investor was among Devon's 5 largest shareholders at the time of the report, placing the demands among positions taken by major holders of the company's shares. The options Toms Capital was pushing included "selling assets or putting the company itself up for sale," according to Reuters' description of the investor's demands. The agency also reported that Kimmeridge, an energy-focused investor, had called for measures including asset sales to simplify Devon's business. Bloomberg coverage published on September 23 again highlighted the investors, with Toms Capital calling for alternatives including a company sale and Kimmeridge criticizing the slow pace of asset disposals.
The plan for the Eagle Ford proceeds combines returning cash to shareholders with reducing leverage, as Devon said it wanted to "accelerate share repurchases" alongside debt reduction. Following its merger with Coterra, the company approved an $8 billion share repurchase program, according to its announcement updating capital returns. Authorization for the program expires on June 30, 2029, the specified end date of the approved authorization period. On the balance sheet, outstanding debt stood at $11.4 billion at the end of the second quarter, according to a company filing with the U.S. Securities and Exchange Commission. The decision to allocate the after-tax sale proceeds for this purpose comes alongside the approved buyback program.
Devon's portfolio review follows the completion of its all-stock merger with Coterra on May 7, 2026, according to the announcement closing the transaction. At completion, the company set a target of $1 billion in annual pretax savings as part of the plan to combine the companies. The announcement targets achieving those savings by the end of 2027, with the figure remaining a goal of the merger plan. According to Devon's filing with the U.S. Securities and Exchange Commission, the company is evaluating each asset individually to determine its place in the portfolio. The assessment focuses on "capital efficiency, free cash flow contribution and strategic fit," the criteria the company set for its asset review.
In the stock market, Devon's performance lagged the energy sector index when Reuters published its June report on investor pressure. The company's shares had risen about 17% from the start of 2026 through that report, according to the agency. Over the same period, the S&P Energy Index gained 22%, outpacing Devon's shares. Investing later reported that the stock rose 2.8% in morning trading on September 23, 2026. The move followed a report that Toms Capital was demanding a review of strategic options, including a sale of the entire company.
Devon will provide additional details on the impact of the Eagle Ford asset sale on its operating outlook when it releases quarterly results on November 5, 2026, according to the agreement announcement. The forthcoming disclosure of the deal's impact is scheduled for the results date set by the company. Devon will then hold its earnings conference call and accompanying webcast on November 6, 2026. The company expects the Eagle Ford deal to close near the end of 2026, according to the announced sale timeline. Closing remains subject to regulatory approvals and customary closing conditions.