DVN: Big Federal Lease Sale Purchase at $2.6 Billion

Research evidence excerpt

DVN: Big Federal Lease Sale Purchase at $2.6 Billion

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Scott Hanold (Analyst)

Octavian Jordan (AVP)

Samuel Cox (Senior Associate)

May 20, 2026

Devon Energy Corporation

Big Federal Lease Sale Purchase at $2.6 Billion

NYSE: DVN | USD 48.46 | Sector Perform | Price Target USD 59.00

Sentiment: Neutral

RBC Quick Take: DVN made a big splash in today's federal lease sale by winning 16,297 acres across 24 parcels for $2.6 billion.

The price paid will draw a lot of attention, but we do recognize that this is very high quality acreage with low royalties (1/8), so

economics from these areas should be top tier. However, if we assume wells are drilled with 10,000 foot laterals and there are

24 wells per unit, that infers $7-8 million per location (306 locations), which is eye watering compared to historical M&A in the

Permian. We think this could draw mixed investor views, but DVN is likely evaluating significant asset sales post the recent CTRA

merger. We believe this is positive for DVN's inventory build in the Permian, but the price paid could draw investor scrutiny.

News Summary

• DVN participated in today's federal lease sale in NM, spending over $2.6 billion for 16,297 acres.

• DVN paid $160,000/per acre, which is well above historical sales.

• There was a total of 74 parcels available for 33,530 acres with total bids of $4.0 billion or an average of $120,000/acre.

All values in USD unless otherwise noted. Priced as of prior trading day's market close, EST (unless otherwise noted).

Disseminated: May 20, 2026 16:57EDT; Produced: May 20, 2026 16:57EDT

For Required Conflicts Disclosures, see page 2

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