Shale producer Devon Energy Corporation (NYSE:DVN) has reportedly given an acquisition offer to Enerplus Corp (NYSE:ERF) for an undisclosed amount.
Enerplus, which has a market value of C$4 billion ($3 billion), operates mainly in the Bakken Basin in North Dakota, and the deal, if it materializes, would complement its existing presence in North Dakota and reduce its reliance on the Delaware Basin in Texas and New Mexico, reported Reuters.
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As per the report, Kimmeridge Energy Management, Enerplus' second-largest shareholder with a 3.8% stake (as per LSEG data), said Enerplus should make sure any deal price it agrees to values the company fairly.
As per the report, TD Securities analysts commented on the news, "Devon could afford to pay $3.5 billion for Enerplus with cash on hand and cash flow it expects to generate this year."
Devon will report fourth-quarter results on February 27 and Enerplus on February 22, 2024.
As of September 30, Devon Energy had cash and cash equivalent of $761 million.
Last year, Devon Energy was exploring potential acquisition opportunities to bolster its presence in the U.S. shale sector, involving preliminary discussions regarding a possible merger with Marathon Oil Corp (NYSE:MRO).
Price Action: DVN shares are trading higher by 0.02% at $42.42, and ERF, which closed higher by over 8% yesterday, is up 0.32% at $15.55 premarket on the last check Friday.