Devon Energy (DVN) - Get Report shares jumped Tuesday after Raymond James analyst John Freeman upgraded the oil and gas producer to strong buy from outperform and raised his price target to $40 from $34.
The strong performance of Devon's Delaware wells offer opportunities for productivity gains, he said, according to The Fly. That would boost Devon's free-cash-flow-to-enterprise-value ratio, which could mean a higher dividend yield, Freeman said.
Devon shares recently traded at $30, up 13.0%. They have doubled over the past six months amid rising oil prices and optimism for an economic recovery.
Oil prices hit 2 1/2-year highs Tuesday after the OPEC+ alliance predicted rising prices, as demand is rising while supply is falling. And nuclear talks with Iran haven’t produced an accord yet. OPEC plans to raise production next month.
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U.S. crude recently traded at $67.75 a barrel, up 2.16%.
Under terms of the deal, Cimarex shareholders will receive 4.0146 shares of Cabot for each share of Cimarex common stock they own. Once finalized, Cabot shareholders will own approximately 49.5% and Cimarex shareholders will own approximately 50.5%.
The deal combines Cabot's roughly 173,000 net acres in the Marcellus Shale and Cimarex's approximately 560,000 net acres in the Permian and Anadarko basins.