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HOUSTON - LandBridge Company LLC (NYSE:LB) announced Monday it has secured a 10-year surface use and pore space reservation agreement with Devon Energy Corp. (NYSE:DVN), a $20.75 billion market cap energy company with consistently strong financial health, to support Devon’s operations in New Mexico’s Delaware Basin.
Under the agreement, LandBridge will provide Devon with 300,000 barrels per day (bpd) of pore space capacity on its East Stateline Ranch and Speed Ranch surface acreage. The reservation will begin in the second quarter of 2027 and includes a minimum volume commitment from Devon to deliver at least 175,000 bpd of produced water. According to InvestingPro analysis, Devon Energy appears undervalued based on its Fair Value metrics, with the company maintaining dividend payments for 33 consecutive years.
The agreement aims to address Devon’s water management needs in the Delaware Basin, which is part of the Permian Basin, currently the most active region for oil and gas development in the United States. Want deeper insights? InvestingPro subscribers get access to exclusive analysis and 12+ additional ProTips for Devon Energy.
"We’re thrilled to expand our relationship with Devon Energy through this long-term agreement," said Jason Long, Chief Executive Officer of LandBridge, in a press release statement.
LandBridge owns approximately 277,000 surface acres across Texas and New Mexico, with significant holdings in the Delaware Basin region. The company was formed by Five Point Infrastructure LLC, a private equity firm that invests in energy and infrastructure companies in the Permian Basin.
The agreement represents a continuation of water management solutions in the region, where handling produced water from oil and gas operations remains a significant operational challenge for energy producers.
In other recent news, Devon Energy Corp. reported its second-quarter earnings, which slightly missed analyst expectations. The company posted adjusted earnings per share of $0.84, falling short of the $0.88 estimated by analysts. However, Devon Energy’s revenue of $4.28 billion exceeded the consensus forecast of $4.04 billion. In addition to its financial results, the company raised its full-year production outlook, signaling confidence in its operational capabilities. Devon Energy also announced a reduction in its capital spending guidance, reflecting a strategic shift in resource allocation. These developments come as the company continues to navigate the complexities of the energy market. Investors appeared to weigh the earnings miss against the positive operational guidance.
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