Marcellus Assets Create New Financing Possibilities

Just a few short weeks after completing a $58B merger with Coterra Energy earlier in May, Devon Energy received an offer of $8B for its shale assets in the Marcellus region of Pennsylvania. The offer, from money manager Stone Ridge Asset Management, covers about 190,000 net acres and could become the largest asset-backed securitization funding ever attempted in the United States oil and gas sector. (Source).

As noted in Business News Today, the Coterra merger gave Devon both assets and exposure across the Marcellus, Anadarko, Eagle Ford and Williston Basins, with the attendant risks and opportunities. Devon must now show that it can handle such varied assets, or else divest itself of those not related to its core business.

The Marcellus assets are expected to account for approximately twenty percent of Devon’s 1.6M barrels of oil equivalent (boe)/day production forecast in 2026. (Source). Part of the importance of the Stone Ridge offer is that it provides a clear price point for Devon’s Marcellus assets, and not a theoretical framework for discussion of value. While Devon DEO Clay Gaspar has indicated that Devon might divert some non-core positions, the company recently has been in an expansion mode. On May 20 it was the biggest buyer of oil and gas drilling rights on federal land in New Mexico and Texas at an auction held by the federal government. In fact, Devon was responsible for $2.5B out of the total $4B sale, a record for such auctions.

Regardless of whether Devon accepts the Stone Ridge offer, the fact of the offer itself shows the value of such wells in Pennsylvania. As of February 2026, the Keystone State has 281,000 wells which produce an average of 1,073,895 million cubic feet (mcf) per natural gas well. (Source). That makes Pennsylvania the second largest producer of natural gas in the United States, accounting for approximately 19% of the national total. (Source). This is an extraordinary statistic given that approximately twenty years ago Pennsylvania had almost no natural gas industry at all.

Pennsylvania’s natural gas reserves doubled from 2013 to 2023 and now reaches an estimate of 101 trillion cubic feel (Tcf). (Source). As the state uses only about one-quarter of the natural gas that it produces, Pennsylvania truly becomes the “keystone” for surrounding states in providing natural gas, especially to states north and east like New York, which has plentiful natural gas reserves but chooses not to develop them, or New Jersey which has limited reserves.

In addition, the Marcellus Basin assets have demonstrated low decline rates. As such there is talk that these assets might lend themselves to securitization of individual wells, which could be appealing to potential investors looking for an interest in energy assets. This is made possible by the lower depletion rates, making these assets attractive to investors over the longer term. (Source).

Likely then, Stone Ridge would partner with an operator to extract the natural gas while using its financing skill to develop, produce and sell an investment vehicle. If successful, this could help revolutionize the energy industry – at least in the Marcellus – and drive up even further the value of Marcellus assets.

However the Stone Ridge offer for Devon’s Marcellus assets shakes out, it could be that the big winner is Pennsylvania. Unlike New York, Pennsylvania welcomed the energy industry, and that industry may continue to make Pennsylvania a strong place to do business into the middle of the twenty-first century.