Devon Energy and Coterra Energy announced on Feb. 2 an agreement to merge the two companies in an all-stock transaction with an enterprise value of about $58 billion.
The merger of Oklahoma City-based Devon Energy and Houston-based Coterra Energy creates one of the largest shale operators in the Delaware Basin, a sub-basin of the Permian Basin in West Texas and southern New Mexico.
The combined entities will take the Devon Energy brand and be headquartered in Houston, but will maintain a presence in Oklahoma City.
Combining the companies and leveraging their core strengths and assets will optimize capital allocation, free up cash flow, and maximize shareholder returns, the companies said in a press release.
“This transformative merger combines two companies with proud histories and cultures of operational excellence, creating a premier shale operator,” said Devon Energy President and CEO Clay Gaspar.
“We’ve now built a diverse asset base of high-quality, long duration inventory to drive resilient value creation and returns for shareholders through cycles. Underpinned by our leading position in the best part of the Delaware Basin, and a deep set of complementary assets, we expect to capture annual pre-tax synergies of $1 billion. This will drive higher free cash flow and greater shareholder returns beyond what either company could achieve alone.”
Devon Energy’s Gaspar will lead the new company as president and CEO, while Coterra Energy’s Chairman and President Tom Jorden will serve as nonexecutive chair of the company’s board.
Under the terms of the agreement, which is expected to close in the second quarter of 2026 pending regulatory approval and other closing conditions, Coterra shareholders will receive 0.70 shares of Devon Energy common stock for each share of Coterra stock. Devon Energy will own approximately 54 percent of the merged company.
“The combined company will offer best-in-class rock quality and inventory depth, supported by a balanced commodity mix, leading cost structure, and a conservative balance sheet,” Jorden said.
“Devon Energy will be strongly positioned to deliver top-tier capital efficiency gains and consistent profitable per share growth through the commodity cycles.”
Once the transaction closes, the company announced it will declare a quarterly dividend of $0.315 cents per share and will repurchase more than $5 billion of shares pending board approval.
The combined entities will form one of the largest oil and natural gas operators in the Delaware Basin. Devon Energy’s holdings in the region span approximately 400,000 acres. It also has its Eagle Ford operations in DeWitt and Karnes counties in south Texas, as well as the Anadarko Basin in central Oklahoma. Devon Energy also has exploration positions in Wyoming and Montana.
Coterra Energy operates 346,000 net acres in the Permian Basin, along with 181,000 net acres in the Anadarko Basin. It also holds 186,000 acres in the Marcellus Shale formation in Susquehanna County, Pennsylvania.
Daily combined production in the third quarter of 2025 topped 550,000 barrels of oil and 4.3 billion cubic feet of natural gas, with more than half of oil and gas production coming from the companies’ operations in the Delaware Basin.
“We become a clear leader in the Delaware Basin giving us unmatched opportunity to capitalize on our core position,” Gaspar said on a conference call with analysts and institutional investors.
