Devon Stocks Up on Oil & Gas Production Acreage in Permian

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Devon Energy advanced its position in the Permian through the merger of Coterra Energy early this year. Further acreage came through a federal auction.

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Devon Pays $161,500 per Net Acre

After building up its footprint through a merger earlier this year, Devon Energy said it added 16,300 net acres to its Permian portfolio through a federal auction.

Industrial Info Resources data show Ovintiv leading the way, with some $1 billion in drilling-related projects in the broader Permian Basin. But on Thursday, Devon said it secured new drilling rights in the Permian for $161,500 per net acre in an auction steered by the federal Bureau of Land Management.

"Each tract was evaluated on rock quality, midstream connectivity, strategic fit and per-share value accretion for our owners," said Clay Gaspar, the company's president and chief executive officer. "This acquisition is consistent with our successful ground game track record and strengthens our leading Delaware Basin position."

Delaware is a sub-basin within the Permian. In February, the company announced it entered into an all-stock merger with Coterra Energy, creating what Devon said is "one of the largest shale operators in the world with an asset base anchored by a premier position in the economic core of the Delaware Basin."

The Permian Basin is Evolving

The broader Permian is the largest inland crude oil producer in the United States. The U.S. Department of Energy expects production this year to show a 0.75% annual increase to 6.63 million barrels per day (bpd). Production expands again by a staggering 6.1% by next year to top 7 million bpd, which would account for 60% of total inland crude oil production, should the federal forecast prove accurate.

While Devon's portfolio is spread throughout North America, its central focus is in the Permian, where it holds nearly 750,000 acres after the merger with Coterra. Combined, the companies said they hold the industry's largest inventory of wells that can produce profitably with oil priced at around $40 per barrel. For more on that, see February 3, 2026, article - Devon-Coterra $58 Billion Tie-up Targets Large Inventory of Sub-$40 Wells.

"Our combined understanding of the basin following the Coterra merger only reinforced our conviction in the quality and depth of this inventory and our confidence in moving decisively to capture these accretive high-quality opportunities," Devon's Gaspar said.

The Permian is starting to yield more gas, however, as the basin matures and pressure changes leave heavy molecules associated with crude oil trapped underground.

Industrial Info data show a Devon Energy exploration and drilling program this year and continuing into 2027 in Lea County, New Mexico, resulting in around 89 new wells this year and perhaps more than 140 in 2027.

In its earnings report for the second quarter, Devon said it expected to produce around 860,000 barrels of oil equivalent per day (boe/d) during the period, with 46% of that as oil. Cash spending is pegged at $900 million. First quarter production averaged 833,000 boe/d over the three-month period ending March 31.

Devon did not provide a full-year guidance in its report for the first quarter.

By the Numbers

• 16,300 net Permian acres from federal auction
• $40 break-even for Devon

Key Takeaways

• Devon, Coterra tie-up creates Permian giant
• The basin is getting gassier at it matures

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