NEW ENERGY
Devon, WPX close deal to merge; now workforce integration begins
Devon Energy and WPX Energy have closed on their agreement to create a new company that holds a dominant position in the Delaware Basin.
But while officials for the new Devon Energy announced Thursday morning they successfully completed a process to combine the companies that started several months ago and was approved by shareholders last week, plenty of integration- related work remains to be done.
First things, first. On Thursday, the company announced directors for the new Devon. They are:
• David A. Hager, executive chairman.
• Barbara M. Baumann.
• John E. Bethancourt.
• Ann G. Fox.
• Kelt Kindick.
• John Krenicki Jr.
• Karl F. Kurz.
• Robert A. Mosbacher Jr.
• Richard E. Muncrief.
• D. Martin Phillips.
• Duane C. Radtke.
• Valerie M. Williams. The new Devon was created through what company officials described as an allstock merger of equals that set it up with an asset base that is underpinned by “premium” acreage it holds in the Delaware Basin, which covers much of west Texas and eastern New Mexico.
The company also holds and produces from assets it has in the Anadarko, Powder River and Williston basins and the Eagle Ford Shale field.
“This transformational merger enhances the scale of our operations, builds a dominant position in the Delaware Basin and accelerates our cashreturn business model that prioritizes free cash flow generation and the return of capital to shareholders,” Hager stated as part of Thursday's announcement. “We are excited to combine our teams and we look forward to executing on our disciplined strategy to create value for all of our stakeholders.”
Muncrief, who assumed the mantle of CEO at the new company Thursday, added his congratulations to the staffs of the old Devon and WPX for their work to pull the deal off in such a short period of time.
“I want to thank employees for their determined work to complete a transaction of this size and scale in basically just three months,” Muncrief stated Thursday. “This paves the way for our integration to pick up even more steam and establishes Devon as one of the strongest energy producers in the U.S. The company's advantaged assets, operating capabilities, balance sheet, and our resolve to pursue efficient, innovative ways of doing business positions Devon to deliver differentiated financial and operational results for many years to come.”
Still, while previous regulatory filings issued by the two companies identified key personnel who are overseeing various segments of the new company's operations, now the work begins to identify which employees will stay with the new company.
At the end of September, WPX employed 600, with about 400 of those at its Tulsa corporate headquarters in the BOK Tower and the remainder in the companies' field offices both in the Delaware and Williston basins. Devon, meanwhile, employed about 1,400, including about 850 in Oklahoma City.
Integration activities could potentially affect all of New Devon's employees.
“Everyone at the former WPX's Tulsa office expects to get clarity on the future of our roles within four to eight weeks as the new organization takes more shape. That doesn't mean the new organization will be done by then and in place — that's just the goal for letting employees here know who will not be needed, who may receive an offer to work for Devon, and who will be asked to support the transition on a temporary basis during 2021,” said spokesman Kelly Swan. “Please do not assume that our 400 people will be relocating. That is not accurate. There are significant costs savings built into the deal's economics, one element of which is (the elimination of) obvious redundancies in staffing.”
Business writer Jack Money covers Oklahoma's energy and agricultural beats for the newspaper and Oklahoman. com. Contact him at jmoney@ oklahoman. com. Please support his work and that of other Oklahoman journalists by purchasing a subscription at oklahoman.com/subscribe today.