Pelican Bay Capital Management, LLC on Devon Energy

Devon is Pelican Bay's newest portfolio addition and is built around a combination of high-quality oil and gas assets, a clean balance sheet and substantial expected free cash flow. The fund believes the market was pricing in commodity assumptions of roughly $62 oil and $2.80 natural gas at the time of purchase, levels it viewed as far too conservative. It also sees additional upside from an $8 billion repurchase program representing about 14% of market capitalization and from a broader energy thesis that US natural gas prices should converge toward international levels as LNG export capacity and data-centre power demand increase. Pelican Bay estimated intrinsic value at $70 to $110 per share versus a roughly $50 initiation price, but the letter gives a range rather than a single target price. P(1) Pelican Bay Capital Manage… P(1) Pelican Bay Capital Manage…