S&P affirms Devon Energy

Standard & Poor's said it affirmed Devon Energy Corp.'s BBB corporate credit rating following the company's announcement that it will acquire privately held Chief Holdings LLC for $2.2 billion in cash and debt. The outlook is positive.

Pro forma for the acquisition, Devon Energy will have about $7.2 billion of debt outstanding.

S&P said the affirmation reflects its assessment that the proposed acquisition of Chief, a natural gas producer whose assets are located entirely in the Barnett Shale in North Texas, fits Devon Energy's strategy as the dominant producer in that basin.

The agency also said that while the acquisition is quite expensive by virtually any measure and mildly leveraging, because of the unique fit that the Chief assets provide S&P does not view the transaction as a harbinger of a return to the excessive acquisitiveness Devon exhibited in the late 1990s and earlier this decade.

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