Note from Neal Dingmann at Truist Financial. Neal rates DVN a BUY with a price target of $115, which compares to my valuation of $94.
Devon Energy Corporation (DVN, $57.52, Buy) - Slightly Surprising Eagle Ford Deal Boosts Investor Payout
- Devon announced the acquisition of Validus (private) that adds 42k
adjacent Eagle Ford acres to its current position though the new
assets are in a much oilier window in Karnes County than the
existing footprint. We expect the stock to react relatively favorably
to the news given the purchase price by the company is an
estimated ~2.0x cashflows with a 30% FCF yield and all cash,
boosting the incremental variable dividends per share. However
relative to DVN’s EV, the acquisition is relatively small and likely
to not drive a material investor reaction in either direction.
Devon (DVN) price target - Aug 10
Devon (DVN) price target - Aug 10
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Devon (DVN) price target - Aug 10
> Neal rates DVN a BUY with a price target of $115, which compares to my valuation of $94
Why are you so conservative?
Why are you so conservative?
Re: Devon (DVN) price target - Aug 10
$94 is 7.5 X annualized operating cash flow for 2021-2023.
If WTI moves back to $100/bbl there is definitely more upside since Devon has very little production hedged after 2022.
Neal Dingmann is a highly respected energy sector analyst, so his opinion is worth paying attention to.
DVN is in our High Yield Income Portfolio. Dividend yield is ~9%.
If WTI moves back to $100/bbl there is definitely more upside since Devon has very little production hedged after 2022.
Neal Dingmann is a highly respected energy sector analyst, so his opinion is worth paying attention to.
DVN is in our High Yield Income Portfolio. Dividend yield is ~9%.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Devon (DVN) price target - Aug 10
I have updated my forecast/valuation model for DVN and I am raising my current valuation by $4 to $98 per share.
DVN closed at $64.46 on August 11.
TipRanks: "In the last 3 months, 17 ranked analysts set 12-month price targets for DVN. The average price target among the analysts is $81.76. The 17 price targets range from $61 to $115. On 8/10/2022 Truist Financials analyst Neal Dingmand Maintains Buy on Devon Energy, Raises Price Target to $115."
The Validus Acquisition is expected to close late in September and add 35,000 Boepd of production. Q4 production should be ~650,000 Boepd, up from 616,000 Boepd in Q2 2022.
DVN closed at $64.46 on August 11.
TipRanks: "In the last 3 months, 17 ranked analysts set 12-month price targets for DVN. The average price target among the analysts is $81.76. The 17 price targets range from $61 to $115. On 8/10/2022 Truist Financials analyst Neal Dingmand Maintains Buy on Devon Energy, Raises Price Target to $115."
The Validus Acquisition is expected to close late in September and add 35,000 Boepd of production. Q4 production should be ~650,000 Boepd, up from 616,000 Boepd in Q2 2022.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Devon (DVN) price target - Aug 10
Maturing Eagle Ford shale still has 'long runway'. Energy Intelligence.
The Eagle Ford Shale may be maturing, but operators believe there is still plenty of life in the South Texas play. That became apparent earlier this week, when Devon Energy announced it would acquire privately held Validus Energy for $1.8 billion, the biggest Eagle Ford deal since 2018. The transaction nearly doubles Devon’s current output of 38,000 barrels of oil equivalent per day. While Validus’ already producing assets were the main attraction, as it allows Devon to seamlessly grow output to capitalize on high oil prices, the properties also hold 350 “repeatable drilling locations” in the core of the Karnes Trough oil window, along with 150 “high-quality” older wells that could be recompleted in the future, the buyer said.
Karnes County is the "Core of the Core" area in the Eagle Ford. EOG has reported Eagle Ford wells in Karnes that IP'd at over 5,000 Boepd.
The Eagle Ford Shale may be maturing, but operators believe there is still plenty of life in the South Texas play. That became apparent earlier this week, when Devon Energy announced it would acquire privately held Validus Energy for $1.8 billion, the biggest Eagle Ford deal since 2018. The transaction nearly doubles Devon’s current output of 38,000 barrels of oil equivalent per day. While Validus’ already producing assets were the main attraction, as it allows Devon to seamlessly grow output to capitalize on high oil prices, the properties also hold 350 “repeatable drilling locations” in the core of the Karnes Trough oil window, along with 150 “high-quality” older wells that could be recompleted in the future, the buyer said.
Karnes County is the "Core of the Core" area in the Eagle Ford. EOG has reported Eagle Ford wells in Karnes that IP'd at over 5,000 Boepd.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group