Houston-based Carrizo Oil & Gas Inc. has snapped up some of Devon Energy Corp.’s West Texas acreage in the Permian Basin for $215 million, even as it shifts some development south.

The purchase within the Permian’s Delaware sub-basin, set to be completed by year’s end, includes 9,600 net acres in Reeves and Ward counties that are producing around 2,500 boe/d net, 60% weighted to oil. More than 90% of the net acreage is operated with average royalties of 20%.

“This acquisition is an excellent fit with our existing Phantom-area acreage and meaningfully increases our scale in the area,” said CEO S.P. “Chip” Johnson IV. “Upon completion of the transaction, we will hold approximately 26,300 net acres in our Phantom area and 46,000 net acres in the Delaware Basin.”

The acquisition would materially increase Carrizo’s inventory of de-risked drilling locations and offer “significant upside potential from delineating the entire position and testing additional zones,” Johnson said. “The acreage also has a high degree of operational control and minimal near-term drilling obligations.

“As a result, we expect to seamlessly integrate these assets into our existing development plan for the area, which currently assumes a ramp-up in activity in the second half of 2019 as Permian pipeline takeaway is forecast to increase. Over time, we see the potential to achieve meaningful efficiencies through optimizing future large-scale pad development, drilling longer-lateral wells, and integrating the existing infrastructure within our system.”

During a second quarter conference call earlier this month, management said it would shift rigs and capital to the Eagle Ford Shale over the next 18 months to take advantage of better returns in South Texas.

At the end of March, Carrizo was running four rigs in the Delaware and two in the Eagle Ford, but during the second quarter it moved one Delaware rig to the Eagle Ford and recently added a fourth, leaving two Delaware rigs and four Eagle Ford rigs.

The ability to bolt-on acreage to its existing Delaware holdings appeared to be too good of an opportunity to pass up.

According to Carrizo, the Devon leasehold has more than 100 net potential drilling locations across the Wolfcamp A and B formations based on 7,000-foot laterals. Infrastructure also included in the transaction are saltwater disposal wells that could be integrated into Carrizo’s system.

Oklahoma City-based Devon said total proceeds from its divestiture program, including the deal with Carrizo, have reached $4.4 billion. The company expects to monetize additional minor, noncore assets across the United States by year-end. Divestiture packages include enhanced oil recovery projects in the Midland sub-basin of the Permian and in the Rockies, along with Wise County, TX, acreage in its legacy Barnett Shale operations.