By David French
(Reuters) – U.S. oil and gas producer Devon Energy has approached Enerplus, a rival with a market value of C$3.9 billion ($2.9 billion), with a takeover bid, people familiar with the matter said on Thursday.
Such a combination would continue the dealmaking boom we’ve seen in recent months in the North American oil patch, where many of Devon’s rivals — including Exxon Mobil, Chevron and Occidental Petroleum — have made major acquisitions.
Devon declined comment. Enerplus did not immediately respond to a request for comment.
The hunt for better reserves and economies of scale has fueled consolidation in the U.S. oil and gas sector over the past year. Exxon agreed to pay $59.5 billion for Pioneer Natural Resources and $4.9 billion for Denbury. Chevron signed a $53 billion deal for Hess and bought PDC Energy for $6.2 billion. Occidental closed a $12 billion deal for CrownRock.
There is no certainty that Devon and Enerplus will negotiate a deal, the sources said, requesting anonymity because the matter is confidential. Devon’s proposed takeover terms could not be learned.
Enerplus operates primarily in North Dakota’s Bakken Basin, and also has a footprint in Pennsylvania’s Marcellus shale region. If a deal were struck, it would complement Devon’s existing presence in North Dakota and reduce its reliance on the Delaware Basin in Texas and New Mexico.
Enerplus, headquartered in Calgary, sold its Canadian assets to Journey Energy and Surge Energy in 2022 to focus on its more lucrative U.S. acreage.
The bet paid off, generating strong cash flow and enabling Enerplus to return $307 million to shareholders in 2023. The…