Devon Energy Corporation and Coterra Energy Inc. have announced a landmark all-stock merger valued at approximately $58 billion in combined enterprise value, marking one of the largest consolidations in the U.S. shale industry. Revealed on February 2, 2026, the deal is designed to create a premier independent shale operator with greater scale, diversified assets, and improved efficiency. The merger reflects a broader trend of consolidation across the energy sector as companies respond to volatile commodity prices, rising costs, and the need for stronger balance sheets.
Under the terms of the agreement, Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share they own. Once the transaction closes, which is expected in the second quarter of 2026 subject to regulatory and shareholder approvals, Devon shareholders will own approximately 54 percent of the combined company, while Coterra shareholders will hold about 46 percent on a fully diluted basis. The merged entity will operate under the Devon Energy name, relocate its headquarters to Houston, and maintain a significant operational presence in Oklahoma City.
The transaction is expected to generate around $1 billion in annual pre-tax synergies by the end of 2027, largely through operational efficiencies, technology integration, and more disciplined capital allocation. On a pro-forma basis, third-quarter 2025 production is estimated to exceed 1.6 million barrels of oil equivalent per day, positioning the new Devon among the largest independent producers in the U.S. shale sector.
Devon contributes a broad portfolio of oil-weighted assets across several major U.S. basins, including the Delaware Basin in the Permian, the Eagle Ford Shale, the Anadarko Basin, the Powder River Basin, and the Williston Basin. These holdings reflect Devon’s multi-basin strategy focused on high-margin production, cost control, and long-life drilling inventory. Coterra adds a complementary mix of oil and gas assets, with strong positions in the Delaware Basin, the Anadarko Basin, and the Marcellus Shale in Northeast Pennsylvania, one of the lowest-cost natural gas plays in North America.
Together, the combined company will benefit from geographic and commodity diversification, pairing Devon’s oil-focused assets with Coterra’s gas-heavy Marcellus operations. Overlapping positions in the Delaware and Anadarko basins are expected to deliver near-term efficiencies through shared infrastructure and optimized drilling programs, while the broader asset base provides a hedge against swings in oil and gas prices. The scale of the new Devon is also expected to improve bargaining power with service providers and enhance access to capital markets.
For investors, the merger offers potential long-term benefits alongside near-term risks. The anticipated synergies could boost free cash flow and support shareholder returns, particularly if energy prices stabilize. However, market volatility, integration challenges, regulatory scrutiny, and ongoing commodity price uncertainty may weigh on performance in the short term. Overall, the deal positions Devon as a more resilient and competitive shale producer, with its ultimate success tied closely to execution and broader energy market conditions.
