LandBridge Co LLC said Tuesday it had signed a deal to buy about 37,500 acres on Texas’ side of the Delaware Basin from 1918 Ranch & Royalty LLC.
“The acreage to be acquired consists of approximately 22,000 fee surface acres, approximately 3,500 surface acres held pursuant to a long-term management agreement and approximately 12,000 leasehold surface acres”, Houston, Texas-based LandBridge said in a press release.
These are spread across the counties of Loving, Reeves, Ward and Winkler.
Expected to be completed in the fourth quarter, the transaction will increase LandBridge’s holdings to around 300,000 acres, said the oil and gas-focused land management business operating primarily in the Permian sub-basin. Currently LandBridge owns around 277,000 acres across Texas and New Mexico, according to the company.
“Upon closing, this transaction will provide LandBridge with immediate access to high-quality pore space adjacent to its large contiguous surface acreage position in Loving County, Texas”, LandBridge said. “This acreage position is expected to support additional water handling infrastructure necessary to handle escalating commercial produced water volumes in the Stateline region of the Delaware Basin, expanding LandBridge’s ability to deliver economic pore space alternatives to a broader customer base.
“Beyond subsurface assets, the contiguous acreage in northern Reeves County to be acquired in this transaction is well-positioned for alternative energy development due to its proximity to industry demand and current and planned transmission infrastructure, aligning with LandBridge’s commitment to continue optimizing the commercial and strategic value of its acreage position”.
Last month LandBridge announced an agreement with NRG Energy Inc for a potential 1.1-gigawatt gas power plant that would be built by NRG on a LandBridge site in Reeves County, Texas, to support data center electricity demand.
LandBridge chief executive Jason Long said, “This acquisition not only bolsters LandBridge’s capacity to meet rising demand for high-quality pore space but also unlocks new avenues for sustainable surface utilization across our portfolio”.
“Furthermore, we are proud to partner with both 1918 Ranch & Royalty and Mike Harrison and the Harrison family, which currently operates one of the largest ranching operations in Texas, to continue the long legacy of this great asset”, Long added.
Recently, for the New Mexico portion of LandBridge’s Delaware Basin assets, the company signed a 10-year surface use and pore space reservation agreement to support Devon Energy Corp’s operations.
The deal gives Devon 300,000 barrels per day (bpd) of pore space capacity on LandBridge’s East Stateline Ranch and Speed Ranch. The pore space reservation will start in the second quarter of 2027. The deal also includes an obligation to Devon of at least 175,000 bpd of produced water.
“This agreement not only secures Devon’s future water management needs in the region, but also highlights the increasing value of contiguous, underutilized pore space in and around the Delaware Basin”, Long said in a statement August 6.
To contact the author, email jov.onsat@rigzone.com
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