Devon buys prime Delaware Basin land for $2.6 billion following Coterra merger

Shale producer Devon Energy announced on Thursday that it had acquired 16,300 acres of 'net undeveloped land' in the Delaware Basin, New Mexico. The acquisition was made through a federal leasing program and cost $2.6 billion. This strengthened Devon Energy’s position in the United States’ top shale basin.

The deal comes just weeks after Devon Energy completed its $58 billion merger with Coterra Energy. Producers are consolidating to reduce costs and boost scale.

The Delaware Basin is part of the larger Permian Basin that spans?West Texas & New Mexico. It remains the most prolific U.S. Oilfield. Shale producers are vying for low-cost and high-return land.

The transaction is valued at $161.500 per net-acre and adds approximately 400 net drilling locations, normalized to two-mile laterals.

The land is located next to Devon’s existing operations. This allows the company to?leverage existing infrastructure and drill deeper laterals?, it said.

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Devon will finance the purchase using cash that is on hand.

(source: Reuters)