By Greg Roumeliotis and Michael Erman
NEW YORK Nov 19 Devon Energy Corp is
close to a deal to buy privately held GeoSouthern Energy Corp
for around $6 billion, according to a person familiar with the
The deal could be announced as soon as this week, the source
said. The source could not be identified because the talks are
GeoSouthern Energy, based in The Woodlands, Texas, drills
for oil and gas in the Austin Chalk and Eagle Ford geologic
formations in South Texas.
A deal to buy GeoSouthern would be Devon's second large
transaction in less than a month as the Oklahoma City,
Oklahoma-based company seeks to revive stock market investor
interest in its shares.
Devon has been working for years to transform itself. In
2009, the company started selling off international and offshore
assets in order to focus on its North American operations.
In October, the company agreed to combine most of its U.S.
pipeline and processing businesses with those owned by Crosstex
Energy Inc and Crosstex Energy LP and form a
new infrastructure company.
"If there is one criticism of the company, it's that they
don't have exposure to some of the fastest growing
unconventional plays like the Eagle Ford in Texas or the Utica
in Ohio," said Mark Hanson, oil company analyst with Morningstar
The GeoSouthern purchase could make up for some of those
shortcomings. Still, Hanson said that the large purchase could
be "a tacit admission your organic growth strategy didn't work."
Devon declined to comment. GeoSouthern was not immediately
available for comment.
The deal was originally reported in the Wall Street Journal.
Devon shares rose 5.5 percent to $63.04 on Tuesday afternoon on