BP Revisits U.S. Shale Strategy with Devon Eagle Ford Talks

Key points

• BP entered the data room for Devon’s South Texas assets in late August but initially withdrew from a potential deal, according to Reuters sources.
• Devon is marketing its Eagle Ford position and Powder River Basin acreage following its $58 billion merger with Coterra.
• The Eagle Ford assets cover approximately 90,000 net acres and produced about 77,000 barrels of oil equivalent per day in the second quarter.
• Valuations for the assets range from $3.5 billion to $4.0 billion according to Reuters sources, while TPH Research estimates the value at $4.5 billion.
• BP’s BPX Energy unit produced 545,000 barrels of oil equivalent per day in the second quarter, with 205,000 coming from the Eagle Ford, and targets over 650,000 by 2030.
• BP reported $5.7 billion in underlying replacement cost profit in the second quarter, more than double the year-earlier result, driven by higher oil prices and refining margins.

Background

This development follows BP’s recent focus on reducing its balance sheet and divesting assets, with a target of $20 billion in divestments. The company had largely avoided the recent wave of shale acquisitions. However, the current high oil price environment, with Brent crude trading above $100 due to Middle East supply risks, has improved the economics for both sellers and buyers. Additionally, BP previously held a joint venture with Devon in the Eagle Ford, which was dissolved last year, providing existing operational familiarity with the region.

How outlets are covering it

OilPrice.com and Oklahoma Energy Today both report that BP is seriously considering the Devon assets, highlighting the strategic shift under CEO Meg O’Neill. They agree on the production figures and the valuation range, noting the discrepancy between Reuters sources ($3.5–$4.0 billion) and TPH Research ($4.5 billion). Yahoo Finance’s secondary source appears to be a technical error page and provides no substantive content on the deal, so no additional perspective is available from that outlet. All sources confirm that while BP accessed the data room, a final bid has not been confirmed.

Why it matters

The potential acquisition would signal a significant return to U.S. shale growth for BP, reversing its recent divestment strategy. It could increase BP’s production capacity in the Eagle Ford, a key shale region, and impact the valuation of Devon’s remaining assets. The deal also reflects how high oil prices are influencing M&A activity in the energy sector, potentially setting a precedent for other large-cap oil companies to re-enter the U.S. shale market.

What to watch

BP may submit a formal bid for the Devon assets if negotiations progress, though access to the data room does not guarantee a purchase. Devon is expected to continue marketing its Eagle Ford and Powder River Basin assets to other potential buyers. The outcome will depend on whether BP can agree on a price that reflects the current high oil price environment and its strategic goals for 2030 production targets.