Devon Energy Secures 16,300 Acres in Delaware Basin—$2.6 Billion Acquisition Extends Top-Tier Inventory and Enhances Long-Term Value

Major Permian Expansion: Devon Adds 400 High-Quality Well Locations

Devon Energy has taken a bold step to strengthen its foundation in the prolific Delaware Basin, successfully acquiring 16,300 net undeveloped acres in Lea and Eddy Counties, New Mexico, for approximately $2.6 billion. At a price of roughly $161,500 per net acre, this transaction stands out not just for its size, but for strategic positioning—integrating seamlessly with Devon’s established footprint in one of North America’s premier drilling regions.

Deal Details: High-Quality Acreage, Favorable Lease Terms, and Efficient Development

What sets this purchase apart is the quality of the leased assets and the economics they offer. Devon’s newly acquired acreage, when normalized to 2-mile laterals, is expected to add around 400 new net drilling locations. Each location benefits from a particularly attractive 87.5% net revenue interest (NRI) under federal leases—a clear improvement versus typical state and fee leases in the area—on 10-year terms across all depths. This means more upside for every barrel produced and improved returns compared to peer deals.

Cost Synergies and Immediate Scale: Transaction Bolsters Efficiency

This move delivers more than just additional acreage. With the acquired parcels located contiguous to Devon's existing assets, the company gains the ability to drill longer laterals and deploy multi-well pad development, lowering per-well costs and maximizing efficiency. By leveraging its existing facilities and infrastructure, Devon is poised to capitalize on economies of scale and maintain its industry-leading drilling and completion cost performance in the Delaware Basin.

Shareholder Value Stays Front and Center Amid Strategic Growth

Importantly, management emphasized that the $2.6 billion purchase will be funded with existing cash, protecting Devon's credit profile while advancing its $8 billion share repurchase program. Notably, recent M&A—the merger with Coterra completed just two weeks prior—factored heavily into the decision, as combined operational experience and basin know-how reinforced confidence in the value of this acquisition.

CEO Perspective: Favorable Federal Terms Enhance Inventory Quality

"This BLM lease sale presented a rare and compelling opportunity to add high-quality, contiguous federal acreage at scale in the core of the Delaware Basin," noted President and CEO Clay Gaspar. He underlined the immediate accretion to inventory value, thanks to the federal lease’s lower royalty burden, multi-zone potential, and support for efficient, high-return development.

Key Takeaways: Strategic Acquisition Supports Long-Term Growth and Capital Returns

Devon's sizable investment in federal Delaware Basin acreage ensures a deep runway for future growth while maintaining commitment to shareholder returns and capital discipline. For investors, this move signals confidence in both the underlying rock and the company's operational edge, especially as integration of its recent merger unlocks even greater efficiency in one of the nation’s most competitive oil and gas regions.

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