Devon Energy and Coterra Energy merge in an all-stock deal to form a premier, large-cap shale operator with strong synergies.
Devon Energy and Coterra Energy have entered into a definitive agreement to merge in an all-stock transaction, forming a new large-cap shale company with scale, depth, and long-term growth potential. The strategic combination is designed to create a premier U.S. shale operator with a high-quality, diversified asset base, anchored by a leading position in the economic core of the Delaware Basin—one of the most prolific and resilient oil and gas plays in North America.
Following the completion of the transaction, the combined entity will operate under the Devon Energy name. Its corporate headquarters will be located in Houston, while maintaining a strong operational and corporate presence in Oklahoma City. By bringing together two complementary organizations with strong technical capabilities, disciplined capital allocation philosophies, and robust asset portfolios, the merger is expected to unlock significant shareholder value. Central to this value creation is the identification of approximately $1 billion in annual pre-tax synergies, alongside enhanced capital efficiency driven by technology integration and optimized investment decisions. These factors are expected to support both near-term and long-term per-share growth.
The merger brings together high-quality assets with long inventory lives, creating a scaled exploration and production (E&P) company capable of generating durable free cash flow across commodity price cycles. Devon will emerge as a leading operator in the Delaware Basin, supported by more than a decade of high-quality drilling inventory. The transaction is expected to be accretive to key per-share financial metrics, including free cash flow and net asset value, while strengthening the company’s investment-grade balance sheet and reducing its future cost of capital.
Under the terms of the agreement, Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share they own. Based on Devon’s closing share price on January 30, 2026, the combined company will have an estimated enterprise value of approximately $58 billion. Upon closing, Devon shareholders are expected to own about 54 percent of the combined company, with Coterra shareholders holding the remaining 46 percent on a fully diluted basis. The transaction has received unanimous approval from both companies’ boards of directors and is anticipated to close in the second quarter of 2026, subject to regulatory approvals and shareholder consent.
Commenting on the announcement, Devon President and CEO Clay Gaspar described the merger as transformative, noting that it combines two companies with strong legacies of operational excellence. He emphasized that the expanded and diversified asset base, particularly Devon’s enhanced position in the Delaware Basin, is expected to generate resilient free cash flow and superior shareholder returns through market cycles. Gaspar highlighted that the $1 billion in projected annual synergies will enable greater value creation than either company could achieve independently.
Coterra Chairman, President, and CEO Tom Jorden echoed these sentiments, stating that the transaction strengthens the Delaware Basin portfolio and unites two organizations with aligned cultures focused on efficiency, data-driven decision-making, and disciplined capital deployment. He added that the combined company will benefit from best-in-class rock quality, a balanced commodity mix, a competitive cost structure, and a conservative financial profile, positioning Devon Energy for consistent and profitable per-share growth.
Operationally, the merger will create one of the world’s leading shale producers, with pro forma third-quarter 2025 production exceeding 1.6 million barrels of oil equivalent per day. The Delaware Basin alone is expected to contribute more than half of total production and cash flow, supported by nearly 750,000 net acres and an industry-leading inventory of sub-$40 breakeven opportunities. In addition, the integration of advanced AI and digital platforms across subsurface analysis, operations, and enterprise functions is expected to further enhance capital efficiency and performance at scale.
The company also reaffirmed its commitment to shareholder returns, planning to declare a quarterly dividend of $0.315 per share and introduce a new share repurchase program exceeding $5 billion, subject to board approval. With a strong pro forma balance sheet, modest leverage, and ample liquidity, the combined Devon Energy is positioned to deliver sustainable growth, financial resilience, and enhanced returns for investors.
