IB Net Payout Yields Model

Does Devon Energy's Deal Signal a Top in the Shale Boom?

Back in November, Devon Energy (NYSE: DVN  ) announced a deal to acquire Eagle Ford assets from privately held GeoSouthern Energy. The company heralded in the new Devon concept along with the deal that included several positive financial metrics. Considering every deal involves a seller, one has to wonder whether the presented facts will materialize or what encouraged GeoSouthern to cash out of such valuable assets especially considering Blackstone Group (NYSE: BX  ) will exit its stake with this transaction.

Off the top, the biggest concern is the limited acreage of only 82,000 net acres acquired and the likelihood that GeoSouthern has already maxed out the potential reserves. Did Devon just buy these acres at peak prices?

Read the full article here.

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