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October 21, 2020, 06:38:58 am
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Author Topic: Devon to acquire WPX  (Read 3550 times)
Tulsan
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« on: September 27, 2020, 07:34:37 pm »

https://www.reuters.com/article/us-wpx-energy-m-a-devon-energy-exclusive/exclusive-u-s-shale-producer-devon-in-talks-to-acquire-peer-wpx-sources-idUSKBN26H115

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U.S. shale producer Devon Energy Corp is in talks to acquire rival WPX Energy Inc in an all-stock transaction that would create a company worth around $6 billion, people familiar with the matter said on Saturday.

The deal, which would value Tulsa, Oklahoma-based WPX at a small premium to its current share price, could be announced as soon as next week, according to one of the sources.

The sources, who requested anonymity to discuss the private talks, cautioned that an agreement was not guaranteed.

I'm not sure what to say about this except it's too bad for Tulsa.  450 well paying jobs, a company with high growth potential, and a new headquarters.... all headed either down the turnpike or up in smoke.  We've been through worse, but this one is no fun.  

If this happens, they will likely have no presence in Tulsa.  Devon has a massive amount of vacant space in downtown OKC so no reason to pay any rent in Tulsa.  At least the building is out of the ground.  Maybe BOK is ready for its new headquarters, or a new company could move in.

At least this leaked before the deal was done.  If WPX's institutional investors are happy with the transaction, it will go forward.  If not, it may not.. but if the deal doesn't make, WPX will still be an acquisition target and likely to be snatched up by one of the Texas firms looking for opportunities.  

Tomorrow's news will tell the tale.  

Edit: Modified to reflect that the acquisition is moving forward
« Last Edit: September 28, 2020, 03:15:18 pm by Tulsan » Logged
SXSW
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« Reply #1 on: September 27, 2020, 07:54:57 pm »

The people I know familiar with the deal expect maybe a 1/4 of the Tulsa workforce would transfer to OKC.  The rest would remain in Tulsa.  Assuming it is approved of course.  Good opportunity for other companies to move into a nice new office building in the most vibrant section of downtown.  I would bet some of the GKFF spin-offs like Atento Capital would be interested.
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shavethewhales
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« Reply #2 on: September 28, 2020, 07:13:55 am »

(Posted this on the wrong thread last night, oops)

Why does it seem that everything is too good to be true as far as major business developments around here? All those American Airlines jobs that got us excited are down the drain pretty much, and now this, not to mention the legacy of so many other companies that have been HQ'd or present here only to pack up and leave suddenly.

At least we'll have the building... not that we are light on office space, but it could help attract something else, maybe?


This morning the details have come out. It looks like WPX is being bought for just over $5 per share? They were trading higher than that just a few weeks ago... something smells really fishy about this deal.

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Rattle Trap
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« Reply #3 on: September 28, 2020, 07:26:35 am »

https://tulsaworld.com/business/devon-energy-to-acquire-wpx-bloomberg-reports/article_e97a76f0-017d-11eb-9021-23514d5af443.amp.html?utm_campaign=snd-autopilot&utm_medium=social&utm_source=twitter_TulsaWorldBiz&__twitter_impression=true

Sounds like all employees would be moved to OKC and the new HQ here in Tulsa will be sold. Such a shame. WPX was touted as a good company dedicated to Tulsa.

Very exciting for Devon Energy. Now they can lay off hundreds of employees annually from two companies instead of one.
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SXSW
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« Reply #4 on: September 28, 2020, 08:01:40 am »

I don’t know I see this as a great opportunity for a new company not affiliated with oil and gas to move into a beautiful new building in the middle of the Arts District.  Seriously the location couldn’t be better in downtown Tulsa across from Guthrie Green and a easy walk to so many places. 

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Rattle Trap
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« Reply #5 on: September 28, 2020, 08:24:40 am »

I don’t know I see this as a great opportunity for a new company not affiliated with oil and gas to move into a beautiful new building in the middle of the Arts District.  Seriously the location couldn’t be better in downtown Tulsa across from Guthrie Green and a easy walk to so many places. 



There's the silver lining. If WPX chooses to sell the building outright, I'm sure it would be for a good price. The city could toss in some incentives and it would make a very enticing offer for any mid size company to relocate here.

Shifting away from oil and gas should always be the goal, as those jobs are way too volatile and will only shrink in the future, but for the time being its unfortunate as WPX was a well run company, growing, and paid well.

They could very well just lease out the building to several small tenants though.
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ComeOnBenjals
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« Reply #6 on: September 28, 2020, 08:26:45 am »

A bummer regardless of how you look at it.  At least the building is going so it can't be scrapped. Will be interesting to see what they decide to do with it.
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BKDotCom
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« Reply #7 on: September 28, 2020, 09:36:37 am »

I smell a Oneok Tower 2.0 in the works

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Oneok plaza/tower history:
Originally designed to be 52 stories, and then reduced to 37, the plans were modified to the present height of 17 floors after the building was sold during construction.
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shavethewhales
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« Reply #8 on: September 28, 2020, 09:51:20 am »

^Nah, construction is too far along. The building size as it is makes sense if it will be repurposed anyway. It's a big building, but not huge. Sizeable enough to be a HQ for a medium sized company or split into multiple large units.
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« Reply #9 on: September 28, 2020, 10:28:50 am »

^Nah, construction is too far along. The building size as it is makes sense if it will be repurposed anyway. It's a big building, but not huge. Sizeable enough to be a HQ for a medium sized company or split into multiple large units.

Exactly, they will finish the building and either lease it out or sell it outright.  Now if they were just getting started they might consider scaling back but that isn't the case. 
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BKDotCom
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« Reply #10 on: September 28, 2020, 10:36:32 am »

I don't understand the "too bar along" argument.  
Oneok tower was at 16 of  37 floors when they decided to stop.

WPX is currently on floor 3 of a planned 11-story building..
What's stopping them from doing a Oneok or Pythian?
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shavethewhales
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« Reply #11 on: September 28, 2020, 12:12:56 pm »

There's no way they'd get their money back at this point if they decided to cap it off early. The building layout wouldn't make sense. It would be a stub of a building with a massive underground basement. There's no reason not to finish construction and keep it on the balance books for the time being as a non-oil related asset to leverage.
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Tulsan
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« Reply #12 on: September 28, 2020, 03:16:13 pm »

They’re going to finish the building and most likely market it as spec space.
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LandArchPoke
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« Reply #13 on: September 28, 2020, 09:52:21 pm »

They’re going to finish the building and most likely market it as spec space.

The question is in what quality will they finish it... will the outside look like Cimarex Tower 2.0 or will they be using all the same materials as planned. It's also possible they might chop off a few floors. They'll have to build most of it, but they can still downscale it some and it's very possible the exterior will look nothing like promised which would be a huge shame.

The city really should get out and court some major tech companies and maybe get this building to act as a regional post for remote workers in this region. That's likely the future of the office market is regional hubs where remote workers come in for meetings 1-2 times a week then work from home the rest.

Tulsa sits in the central point of 6 million people. It's about an equidistant drive of OKC, NWA, SWMO, etc. and if tech companies or other companies set up a regional office in Tulsa they could recruit in a wide radius around Tulsa for remote workers.

Only good thing is with remote working becoming more popular is hopefully some of WPX employees can continue to live in Tulsa and just commute 1 or 2 times a week to OKC for meetings.
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Oil Capital
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« Reply #14 on: September 29, 2020, 08:59:41 am »

The question is in what quality will they finish it... will the outside look like Cimarex Tower 2.0 or will they be using all the same materials as planned. It's also possible they might chop off a few floors. They'll have to build most of it, but they can still downscale it some and it's very possible the exterior will look nothing like promised which would be a huge shame.

The city really should get out and court some major tech companies and maybe get this building to act as a regional post for remote workers in this region. That's likely the future of the office market is regional hubs where remote workers come in for meetings 1-2 times a week then work from home the rest.

Tulsa sits in the central point of 6 million people. It's about an equidistant drive of OKC, NWA, SWMO, etc. and if tech companies or other companies set up a regional office in Tulsa they could recruit in a wide radius around Tulsa for remote workers.

Only good thing is with remote working becoming more popular is hopefully some of WPX employees can continue to live in Tulsa and just commute 1 or 2 times a week to OKC for meetings.


How useful or important is that 6 Million number?  One has to draw a radius of 175 miles to capture the 6 million people of which Tulsa is in the central point.  Using the same radius, Des Moines is at the center of 5.5 Million people. Springfield Missouri is in the central point of 7.2 million people.   Joplin, Missouri is in the central point of 7.2 million people.  Kansas City: 6.2 Million.  St Louis:  7.8 Million.  And of course the big kahunas of the region:  Dallas: 10 Million and Houston: 9.7 Million.  And our most recent nemesis, Austin:  12.2 million!
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