Shale producer Devon Energy on Thursday said it has acquired 16,300 net undeveloped acres in the core of the Delaware Basin in New Mexico for about $2.6 billion through a federal lease, strengthening its position in the top U.S. shale basin.
The deal comes weeks after Devon closed its $58 billion merger with Coterra Energy, as producers consolidate to cut costs and boost scale.
The Delaware Basin, part of the broader Permian Basin spanning West Texas and New Mexico, remains the most prolific U.S. oilfield and has attracted intense competition among shale producers seeking low-cost, high-return acreage.
The transaction, valued at $161,500 per net acre, adds about 400 net drilling locations normalized to two-mile laterals.
The acreage sits next to Devon’s existing operations, letting the company leverage established infrastructure and drill longer laterals, it said.
The U.S. Bureau of Land Management leases carry an 87.5% net revenue interest and 10-year terms across all depths, which Devon said offers more favorable terms and lower royalty burdens than typical state or private leases in the region.
Devon will fund the acquisition using cash on hand.
(Reporting by Pranav Mathur in Bengaluru; Editing by Sahal Muhammed)