(Reuters) – U.S. oil and gas producer Devon Energy Corp DVN.N said on Monday it will buy shale-oil rival WPX Energy Inc WPX.N for $2.56 billio(£1.99 billion) as it looks to boost its presence in the top U.S. oilfield.
The all-stock deal comes as U.S. shale companies have posted big losses on weak crude prices amid the COVID-19 pandemic and have struggled to raise new capital to restructure debt.
But as producers seek out combinations to survive the coronavirus-induced slump in demand, deals at little or no premium are becoming the norm.
Investors cheered the deal, pushing up WPX shares 17% in Monday afternoon trading, to $5.22, while Devon rose nearly 13% to $9.94.
“Sector consolidation remains a critical focus, though we think news of a DVN/WPX combination is somewhat unexpected and could