Reuters reported on September 24, 2026 that BP p.l.c. (NYSE:BP) studied buying Devon Energy Corporation (NYSE:DVN)’s Eagle Ford assets in South Texas, then walked away, according to one source. BP shares fell 3.4% on Friday, while Devon closed 1.8% higher on Thursday.
Both stocks are up nearly 30% this year and trade below 10 times forward earnings (9.84 for BP, 9.29 for Devon as of September 28), so the difference lies in what each must still prove.
BP’s progress, in particular, looks different when set against Shell, whose stronger cash generation and capital returns provide a useful benchmark for what the oil major still needs to prove.
Photo from PBF Energy LinkedIn
BP: Deleveraging On Commodity Strength, With Repairs Unfinished
The bull case is a balance sheet mending faster than planned.
Second-quarter underlying replacement cost profit reached $5.73 billion, versus $2.35 billion a year earlier and $5.11 billion expected, and net debt fell $3 billion in the quarter.
HSBC (Buy, $51.30 from $46, upgraded from Hold) raised its Brent assumptions to $90 for 2026 and $85 for 2027 and sees much less pressure on BP to sell assets. JPMorgan (Overweight, 675 GBp from 550, upgraded from Neutral) calls the restructuring a value opportunity but expects deleveraging to inflect only from the second half of 2028. Evercore ISI (In Line, $52) sees about $15 billion of second-half free cash flow at current forward prices.
The bear case is that much of this rides on oil and unfinished work.
CEO Meg O’Neill said total liabilities of about $40 billion remain too high and offered no buyback timetable. Capital spending guidance rose to $13.5 billion to $14 billion, upstream reliability fell to 92.4% from 95.7%, and shares slipped nearly 2% on results day as oil eased on hopes of a U.S.-Iran deal.
Piper Sandler (Neutral, $46 from $43) shows how price-driven the upside is, with its 2027 EBITDA estimate about 27% above consensus for majors.
Devon: Scale Is Done, And Disposals Are Next
Devon Energy Corporation closed its $58 billion Coterra merger in May and posted net income of $1.91 billion, its highest since 2022. It returned over $1 billion in the last seven weeks of the quarter, lifted its quarterly dividend 33%, and kept $7.8 billion of buyback authorization, while targeting at least $1 billion of annual synergies by the end of 2027.
Raymond James (Strong Buy, $67 from $64) calls the portfolio review the key catalyst for closing the valuation gap, UBS (Buy, $63 from $55) points to higher oil prices, and Stifel (Buy, $61) expects better capital efficiency to narrow a persistent discount to peers. Seaport (Buy) rates Crescent and SM Energy Sell because their deals added scale without inventory quality, a contrast Devon’s Delaware position invites.
The bear case is the missing sale.
Third-quarter guidance came with higher capital spending of $1.4 billion to $1.5 billion and no divestiture announcement. Siebert Williams Shank’s Gabriele Sorbara said activist pressure from TOMS Capital and Kimmeridge is unlikely to ease until sales materialize. The Eagle Ford asset shows the pricing gap: TPH Research marked it near $4.5 billion, while sources cited $3.5 billion to $4 billion.
What The Smart Money Sees
Hedge fund ownership of Devon Energy Corporation jumped to 82 funds from 58 at the end of the second quarter in the Insider Monkey database, while BP p.l.c. (NYSE:BP) slipped to 46 from 49. Devon short interest rose to 31.64 million shares, or 3.02% of float, from 24.43 million a month earlier, against 0.28% of float for BP.
BP’s case depends on oil prices holding and repairs continuing, while Devon’s depends on delivering asset sales and synergies on schedule.
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