HOUSTON — The Wall Street Journal is reporting that Oklahoma City-based Devon Energy is nearing a deal to acquire privately held GeoSouthern Energy Corp., an exploration company that helped pioneer development of the booming Eagle Ford Shale in South Texas.
The Journal, quoting people familiar with the matter, said the two companies could announce a deal with a value of about $6 billion on Wednesday.
Chip Minty, a Devon spokesman, told FuelFix the company does not comment on “rumors and speculation.” Representatives of GeoSouthern Energy and one of its major investors, Blackstone, did not respond to requests for comment.
GeoSouthern Energy recently leased space at Wildwood Corporate Centre, a three-story building under construction at 460 Wildwood Forest at Interstate 45 North in The Woodlands, with plans to relocate its headquarters there in January, the Houston Chronicle reported in April. The company employs about 140 workers at its headquarters, according to that report.
GeoSouthern is a privately owned company founded in 1981 that last year held drilling rights over 120,500 net acres “in an attractive portion of the Eagle Ford trend,” according to a 2012 press release from Blackstone.
Devon is in the midst of a transformation after a dramatic collapse last year. The company’s earnings of more than $2 billion in 2010 and 2011, were decimated in 2012 by the natural gas boom, which pushed down prices and left Devon with a loss of $185 million in 2012. Natural gas made up about 62 percent of Devon’s production in 2012, according to filings with the U.S. Securities and Exchange Commission.
Devon has focused its recent efforts on boosting oil production, which has helped the company increase revenues so far this year. But the company’s earnings so far this year are lower than in 2012, according to the company’s latest earnings report. Devon had a net loss of $227 million through the first 9 months of 2013, compared with a profit of $151 million during that same period last year.
Devon opted to close its Houston office in 2012 as part of a consolidation and cost-cuttng plan, moving its staff into its gleaming, 50-story skyscraper in Oklahoma City.
Devon said early this year that it was “the first and only U.S.-based independent energy company to develop and operate a bitumen oil sands project in Canada,” according to regulatory filings. The company’s production of oil from Canada averaged 38,000 barrels per day in the third quarter of 2013.
Devon’s total oil production was 690,000 barrels of oil equivalent per day during the three months that ended Sept. 30, with natural gas accounting for 57 percent of production, according to regulatory filings. Its third-quarter oil production of 119,000 barrels per day was up 21 percent from the same period a year ago, according to regulatory filings.
Also on FuelFix:
Top 10 deals of the US energy boom
Nati Harnik / AP
10. $9.2 billion
In March 2011, Berkshire Hathaway announced plans to buy Wickliffe, Ohio-based specialty chemicals company Lubrizol in an all-cash deal.
[photo: Warren Buffet, chairman and CEO of Berkshire Hathaway]
9. $9.3 billion
In June 2011, Dallas-based Energy Transfer Equity announced plans to buy Houston’s Southern Union Co. in a stock deal, creating one of the largest natural gas pipeline companies in U.S.
[photo: The Travis Tower, or 1300 Main, in downtown Houston was purchased by Dallas-based Energy Transfer Partners in August 2011.]
8. $10.2 billion
In April 2011, Exelon Corp. agreed to buy Constellation Energy Group Inc. in a stock deal led by CEO John
Rowe, then the longest-serving utility CEO in the country.
[photo: Then- Exelon Corp. CEO John Rowe]
Plains Exploration and Productio
7. $10.2 billion
In December 2012, global mining powerhouse Freeport-McMoRan Copper & Gold Inc. announced plans to buy Plains Exploration and Production Co. in a cash and stock deal, making a big and risky jump into the oil and gas business.
[photo: A Plains Exploration and Production Co. worker retrieves data from a well in the Inglewood oil field in Los Angeles.]
Isaac Brekken / Getty Images for National Clean
6. $10.4 billion
In May 2013, Berkshire Hathaway’s MidAmerican Energy utility announced plans to buy Nevada electric and natural gas company NV Energy in a cash deal that expanded the footprint of Warren Buffet's company in the energy sector.
[photo: NV Energy President and CEO Michael Yackira speaks during the National Clean Energy Summit 6.0 at the Mandalay Bay Convention Center on August 13, 2013 in Las Vegas, Nevada.]
TOM REEL / San Antonio Express-News
5. $12.3 billion
In February 2010, oil field services giant Schlumberger announced plans to buy Houston-based drill bits maker Smith International in an all-stock merger.
[photo: In 2012, Robert Drummond, President of Schlumberger North America, (left) talks about his company as Jeremy Aumaugher, South Division Operations Manager,listens.]
Jake Lacey / Jake Lacey
4. $14.9 billion
In July 2011, BHP Billiton announced plans to buy Petrohawk Energy Corp. in an all-cash deal that made the Australian company a bigger player in U.S. onshore energy production.
[photo: A Petrohawk Energy Co. drilling site at the Eagle Ford Shale in McMullen County, Texas.]
Nell Redmond / AP
3. $25.5 billion
In January 2011, Duke Energy Corp. announced plans to buy its North Carolina rival Progress Energy Inc. in a stock deal that would create one of the nation's largest utilities.
[photo: Duke Energy's Charlotte, N.C. corporate headquarters in Feb. 1, 2006]
2. $37.6 billion
In October 2011, Kinder Morgan announced plans to buy El Paso Corp., a Houston-based natural gas producer and pipeline owner in a cash and stock deal. The acquisition encountered regulatory challenges, but eventually created the nation's largest network of pipelines.
[photo: Rockie Express Pipeline]
Matt Nager / Bloomberg
1. $41.4 billion
In December 2009, Exxon Mobil announced plans to buy Fort Worth, Texas-based XTO Energy in a stock deal, making a major bet on the future of natural gas. Exxon Mobil is now the largest producer of natural gas in North America.
[photo: A flag flies otuside the headquarters building of XTO Energy Inc. in Fort Worth, Texas, U.S., on Monday, Dec. 14, 2009.]