E&P and midstream activity

Lower 48 giants Devon Energy Corp. and WPX Energy Inc. said Monday they are tying up in an all-stock transaction valued at $12 billion including debt to create operations dominated by a 400,000 net acre Permian Basin leasehold.

The two Oklahoma-based independents said the company, still branded as Devon, would create a “merger of equals” designed to drive $575 million of annual cash flow improvements by the end of 2021. Maintenance capital funding requirements in 2021 are expected to improve to $2.75/MMBtu Henry Hub natural gas and $33/bbl West Texas Intermediate. 

Devon CEO Dave Hager would be executive chairman of the Oklahoma City-based operations while WPX chief Rick Muncrief has been tapped as president and CEO. The merger, depending on shareholder approval, could...