Competitive bidding generates $326 million from lease sale .
The January 6, 2026, BLM lease sale delivered one of the most competitive federal auctions in recent history, generating $326 million in high bids and producing multiple record‑setting valuations above $200,000 per acre. TGS Well Data Analytics shows why operators were willing to pay unprecedented prices: the highest‑value parcels sit atop some of the most productive stacked pay zones in the Delaware Basin, with nearby wells demonstrating early‑time production exceeding 300 Mboe in the first three months (IP90). This record-breaking lease sale follows newly finalized federal rules that reduced the onshore royalty rate from 16.67% to 12.5%, giving operators the chance to acquire top tier acreage at a royalty discount. As seen in figure 1, the top 3 operators by total bonus bid approached the sale with sharply contrasting strategies that reveal how they view the next phase of Permian development. In this article, we will use TGS Well Data Analytics to evaluate acreage gained from this lease sale.
Figure 1. A) Summary of 01/06/26 BLM Lease Sale Results. B) Lease Sale Acreage by Operator. C) Acreage by Bid Amount ($/acre)
The headline numbers came from Devon Energy and Longleaf Resources, who shattered the previous federal lease record of $180,000 per acre. Devon set a new national high with a $218,751/acre bid for a 320‑acre parcel in southeast Eddy County, contributing to its $79.2 million total spend. The parcel drew interest from ten bidders and sits in one of the most heavily developed sections of the Delaware Basin. Figure 2 shows offset wells from 8,400’ to 12,600’ TVD delivering exceptional results, with Bone Spring wells reaching an IP90 of 200 Mboe and deeper Wolfcamp wells reaching an IP90 of 300 Mboe. This is over 4,000’ of net pay in prolific Bone Spring and Wolfcamp formations with IP90s up to 200 Mboe, with 1,000’ in the Wolfcamp that has been shown to break 300 Mboe IP90. Premium large, stacked play potential, possibly along with discounted royalty rates, is the driving factor behind these record-breaking acreage bids. Devon also secured high bids on an additional 620 acres in central Eddy County. In total, Devon came out with 940 acres in Eddy County, primarily investing in familiar, high‑performing acreage where they already operate and with a clear development roadmap.
Figure 2. Offset Well Analysis of Devon Energy’s $218,751/acre parcel.
Longleaf Resources, backed by private equity, followed a similar playbook—targeting premium stacked pay acreage with proven offsets. Their sole winning bid was $211,263/acre for a 160‑acre parcel, also breaking the previous federal record. Figure 3 shows strong stacked performance from 9,400’ to 12,500’ TVD, with more than 200 Mboe IP90s demonstrated across both Bone Spring and Wolfcamp intervals. Assuming 2-mile laterals and an average well spacing of 1,000 ft in the area, quick calculations show that this acreage could yield 6 MMboe from the Bone Spring alone. While the net pay window is slightly narrower than Devon’s target area, the productivity profile remains robust, making Longleaf’s focused, high‑value approach consistent with a strategy aimed at rapid value creation.
Figure 3. Offset Well Analysis of Longleaf Resources’ $211,263/acre parcel
The most aggressive bidder by volume, however, was Buffalo Frontier LLC, a fast‑growing independent that accounted for more than half of the sale’s total revenue. Buffalo Frontier spent $174.8 million and secured 14,000 of the 20,400 acres offered—an enormous, mostly continuous position acquired at an average of $12,466 per acre. Unlike Devon and Longleaf, Buffalo Frontier spread its bids across a wide footprint, winning 11 parcels and assembling a large block of tier‑2 acreage with significant upside potential. Figure 1 shows the bulk of their acreage is over and around Lake McMillan and Brantley Lake. Figure 4 shows that this area is slightly less developed, with many shallow Glorieta wells landing between 2,000’ and 4,000’ TVD and producing under 100 Mboe IP90. However, deeper Bone Spring and Wolfcamp wells from 7,000’ – 9,000’ TVD have reached IP90s up to 200 Mboe, indicating meaningful stacked play potential. With such a large, continuous position, Buffalo Frontier now controls a substantial inventory of future drilling locations, including both proven deeper zones and the possibility of unlocking shallower horizons.
Figure 4. Offset Well Analysis of Buffalo Frontier’s winning bids
In summary, the January 6 lease sale showcased two distinct strategies. Devon and Longleaf paid premium prices for premium rock, targeting proven areas with exceptional stacked pay performance. Buffalo Frontier, by contrast, prioritized scale—amassing a large, continuous position with room for long‑term development and upside. This lease sale continues to demonstrate the high levels of investment and interest in the Permian Basin, with 632 bids placed across 31 parcels. High‑quality Delaware Basin acreage continues to command extraordinary valuations, and operators are having to fight harder to secure premium acreage. The next large lease sale is set to make nearly 70,000 acres available for lease in Wyoming in early March, providing another opportunity to see if new lease and royalty regulations have kickstarted an ongoing trend in increased lease sales revenue.
For more information about TGS Well Data Analytics or to schedule a demo, please contact us at WDPSales@tgs.com.
