Crescent Energy Co. has agreed to pay Devon Energy Corp. about $4.2 billion in cash for Eagle Ford assets producing 68,000 boe/d, a deal that will make Crescent the second-largest producer in the South Texas play.

The package, announced Oct. 8, includes about 90,000 net acres in Karnes, DeWitt, and Gonzales counties, Tex., with net output of 68,000 boe/d — 55-60% oil, including nearly 40,000 b/d of oil. It carries more than 600 net drilling locations in the Karnes Trough, primarily in the lower Eagle Ford, normalized to 10,000-ft laterals.

Crescent described the acquired inventory as Tier 1 and adjacent to its existing Eagle Ford position.

How big does Crescent become?

The acquisition extends a rapid buildout: Crescent has completed nine Eagle Ford acquisitions since June 2023. Following closing, the company expects total production of about 400,000 boe/d, including roughly 170,000 b/d of oil.

"By combining both investing and operating expertise, we have built Crescent into a top 10 independent operator with a world-class Eagle Ford position, where we will now be the second-largest producer," chief executive officer David Rockecharlie said during an Oct. 8 investor call.

The deal also expands Crescent's minerals and royalties business. Devon-owned mineral interests in the package add roughly $50 million in royalties EBITDA and increase the share of Crescent Royalties production operated in-house.

"This grows the cash flow by more than 20%," said Clay Rynd, executive vice-president of investments. "We take a business where we were the operator on about 10% of our cash flow and we make it 40%."

Where do the synergies come from?

Crescent expects to realize about $140 million in annual synergies, fully captured by the end of 2027, across drilling and completions, lease operating expenses, and marketing. Management said most gains will come from drilling and completion efficiencies, chiefly longer laterals and improved surface designs.

"Across our five most recent acquisitions, we've increased average lateral length by more than 25% versus previous operators, driving a step change in cost structure, increasing returns, and lowering breakevens," Rynd said.

Chief operating officer Joey Hall called the acreage familiar ground. "This is our backyard. We understand these assets. We've had line of sight into them for over 10 years," he said.

Hall pointed to the specific efficiency target: "Going from an average of 6,500 ft to 11,500 ft, that's a step change in cost structure. We've been doing this across our acreage, so we're confident we can execute on it and looking forward to hitting that target."

On activity levels, Rockecharlie said Crescent expects to keep roughly the same pace as Devon's current 2-3-rig development program rather than accelerate drilling.

"We think we're going to deliver effectively the same production with less capital, just more capital efficiency, which is greater free cash flow for investors," he said.

He also flagged the assets' fragmented ownership history as upside: "These assets were in a pretty wonky JV structure through multiple operators over the years that just got unwound last year. So there's a lot to do here."

Why is Devon selling?

The Eagle Ford assets account for about 4% of Devon's total production. The divestiture follows investor pressure for further asset sales after Devon's $22-billion acquisition of Coterra Energy Inc. and concentrates capital on the company's highest-return Permian basin opportunities.

"This sale is a direct outcome of our ongoing portfolio review, and it sharpens our focus on the highest-return, longest-duration assets," Devon president and chief executive officer Clay Gaspar said in an Oct. 8 release.

Devon said after-tax proceeds will fund accelerated share repurchases and reduce debt from recent acquisitions and investments.

"This transaction is our strategy at work," Gaspar said. "This divestiture builds on the accretive steps taken in 2026 — combining with Coterra, adding premier Delaware Basin inventory in the federal lease sale and investing in the Solitude pipeline to integrate our gas production from wellhead to market."

What happens next?

The transaction carries an effective date of July 1, 2026, and is expected to close near year-end 2026, subject to regulatory approvals and customary closing conditions. The watch items: antitrust clearance, Crescent's execution on the 11,500-ft lateral target, and progress toward the full $140 million synergy capture by end-2027.