Devon Energy is near a deal to buy GeoSouthern Energy, a privately held oil and gas driller, for about $6 billion, a person briefed on the matter said on Tuesday.
A deal could be announced as soon as this week.
The deal, if completed, comes as companies are seeking to shore up their positions in shale formations rich in oil. But the industry has had few megadeals this year, with energy companies instead focusing on selling off nonessential assets.
In many cases, integrated companies â€" which find and produce oil and gas and then transport it to refineries â€" have instead focused on either “upstream,†which involves exploring and producing resources, or “midstream,†the transporting of the extracted material. Divestitures accounted for 84 percent of total deal volume for the energy sector in the third quarter, according to PricewaterhouseCoopers.
A transaction would be the first big takeover by Devon in three years. The independent driller has focused more on selling in recent years, having raised more than $11.5 billion in proceeds since 2010, according to data from Standard & Poor’s Capital IQ. In October, the company said that it would spin off its midstream assets and merge them with another energy concern, Crosstex.
Buying GeoSouthern would bolster Devon’s position in the Eagle Ford formation in South Texas, one of the most popular fields in recent years. The smaller oil company was one of the first in the region, and has spent much of its time in recent years focusing on the Black Hawk field.
One of GeoSouthern’s main investors is the Blackstone Group, which helped the company secure $1 billion in financing to develop its holdings in Black Hawk.
News of the deal talks was reported earlier by The Wall Street Journal.
David Gelles contributed reporting.
