Devon Energy is reportedly interested in buying Enerplus

Devon Energy Corp (NYSE: DVN) is reportedly interested in acquiring Enerplus Corp (NYSE: ERF). Shares of the latter are up nearly 8% at writing.

What we know about Devon-Enerplus news

How much is Devon willing to spend on Enerplus remains unknown.

The energy company has placed a bid but it’s not guaranteed that Enerplus will engage in negotiations, as per sources that talked to Reuters this morning on condition of anonymity.

In 2022, Enerplus said Surge Energy and Journey Energy have agreed to buy its Canadian assets – a deal that enables it to focus more on its lucrative U.S. acreage.  

Wall Street currently has a consensus “overweight” rating on the $3.10 billion company based out of Calgary that currently pays a dividend yield of 1.58%.

Oil and gas space has been consolidating

Neither Devon Energy nor Enerplus has so far commented on the Reuters report on Thursday.

Note that the potential acquiree previously revealed plans of returning about 70% of its FCF (free cash flow) to shareholders in the form of dividend payments and stock buybacks in 2024.

The news arrives a couple weeks before Enerplus Corp is scheduled to report its financial results for the fourth quarter. Consensus is for it to earn 52 cents a share versus 78 cents per share a year ago.

Consolidation has been ongoing in the oil and gas space since early last year with Exxon buying Denbury and Pioneer Natural Resources; Chevron buying Hess Corp and PDC Energy; and Occidental buying CrownRock.