What happened

Oil and gas stocks lit up on Tuesday after crude and natural gas prices inched higher earlier in the day, but Devon Energy (DVN 0.99%) had an altogether different catalyst driving its stock price up by as much as 5.3% at its highest point in trading on Aug. 9.

The upstream oil and gas company is making an acquisition that will also bring in bigger dividends for shareholders in the near future.

So what

Devon Energy will acquire Eagle Ford-focused company, Validus Energy, for $1.8 billion in cash, with the transaction expected to close in the coming weeks.

The acquisition will give Devon access to 42,000 net acres adjacent to its existing Eagle Ford leasehold. As its scale of operations in the region expands, Devon expects to save on costs and add $50 million to its annual cash flows. Validus currently produces roughly 35,000 barrels of oil equivalent (BOE) per day, with volumes expected to rise to 40,000 BOE in 2023.

Importantly, Devon expects the acquisition to be immediately accretive, and boost its earnings and cash flow per share by double-digit percentages. That should help Devon increase its variable dividend payout by up to 10%.

Now what

Devon clearly wants to cash in on the oil boom with this acquisition, as Validus will not only help it expand in an active shale play but double Devon's net acreage in the region and boost its oil mix from Eagle Ford production to almost 60% from 49%.

Above all, Devon investors needn't worry about any potential decline in the company's dividend alongside oil prices.

Devon is a dividend powerhouse that currently pays a fixed dividend per share (DPS) as well as a variable dividend equal to 50% of excess cash flows remaining (after accounting for capital expenditures and the fixed dividend component). The company is doling out hefty dividends to shareholders in the current favorable oil price environment; earlier this month, Devon even increased its fixed dividend component by 13% to $0.18 per share and declared a total dividend (fixed plus variable) of $1.55 per share, representing a 22% jump from its previous payout.

Its Validus acquisition should ensure another stream of big quarterly dividends for shareholders from this 10.8%-yielding stock even if oil prices fall further.