Devon Energy Corporation (NYSE:DVN) announced today it has reached a definitive agreement to acquire GeoSouthern Energy’s assets in the Eagle Ford oil play for $6 billion in cash. The acquired assets include current production of 53,000 barrels of oil equivalent (BOE) per day and 82,000 net acres with at least 1,200 undrilled locations. The risked recoverable resource is estimated at 400 million barrels of oil equivalent, the majority of which is proved reserves. “With this transaction, we have secured a premier acreage position in the very best part of the world-class Eagle Ford oil play. This acquisition enhances our already strong North American portfolio by adding another low-risk, light oil asset that provides outstanding well economics and self-funded growth,” said John Richels, Devon's president and chief executive officer. “Furthermore, this transaction is expected to be immediately accretive to virtually every metric, including cash flow per debt-adjusted share.” The acquired Eagle Ford acreage is located in DeWitt and Lavaca counties in Texas and is largely contiguous, with most of the position held by production. The acreage position is located in the best part of the play, as evidenced by the highest average initial production rates in the entire play and average estimated ultimate recoveries in DeWitt County exceeding 800,000 BOE per well. “We have considered many acquisition opportunities over the past few years, but none have met our stringent criteria,” said Richels. “Our patience and disciplined approach have culminated in this outstanding opportunity, allowing us to secure these world-class light oil assets at 2.5 times expected 2015 EBITDA. Companies with concentrated asset positions in the best oil plays in the country, such as the Eagle Ford, Bakken, and Permian Basin, are trading at substantially higher multiples.” The majority of the acquired acreage is located in DeWitt County and is derisked, with at least one producing well in each drilling unit. By entering the play in full development mode, Devon expects to substantially grow production in the near term while also generating significant free cash flow. The acquired assets are expected to grow at a compound annual growth rate of 25 percent over the next several years, reaching a peak production rate of approximately 140,000 BOE per day. The development drilling program is immediately self-funding and expected to generate annual free cash flow of approximately $800 million beginning in 2015 and growing thereafter.