Devon’s seven-month flurry of M&A repositioned its portfolio to be better suited for growth in a low-price environment. We now estimate that Devon holds the second-largest base of undeveloped North American liquids reserves that generates >10% returns under US$70/bbl WTI. Our deal valuations suggest Devon had to pay a modest premium to acquire the high-upside tight-oil assets, while selling its non-core assets at a small discount. Devon will rely on its proven track record as a strong tight-oil operator to improve results and create incremental value. Gearing is far above historical norms; the company needs to prove it can de-lever orgaincally. We believe Devon is well positioned to generate free cash flow.