Devon Energy Corporation (NYSE: DVN) and Coterra Energy Inc. (NYSE: CTRA) have entered into a definitive agreement to merge in an all-stock transaction that will bring together two sizeable U.S. shale producers. This strategic combination is designed to create a large-cap independent energy producer with a significant asset base centered in the Delaware Basin, one of the most prolific shale regions in the country.
Under the terms of the merger, shareholders of Coterra Energy will receive 0.70 shares of Devon common stock for each Coterra share they currently own. Valued at Devon’s closing share price on January 30, 2026, the transaction implies a combined enterprise value near $58 billion. Both companies’ boards have unanimously approved the deal, which is anticipated to close during the second quarter of 2026, subject to customary closing conditions and regulatory approvals.
Following the completion of the merger, Devon Energy shareholders are expected to hold approximately 54% of the combined company’s fully diluted shares, while Coterra shareholders will own around 46%. The newly merged entity will carry forward the Devon Energy name and will be headquartered in Houston, with a continued significant operational presence in Oklahoma City.
Strategic Benefits and Operational Scale
The combination aims to leverage the complementary strengths and high-quality assets of both companies to build a resilient and cash-generative independent producer. This merger is projected to form one of the world’s leading shale producers with a long-term inventory and a robust free cash flow profile.
Pro forma production estimates for the combined company in the third quarter of fiscal 2025 suggest a total output exceeding 1.6 million barrels of oil equivalent (Boe) per day. This includes more than 550,000 barrels per day of crude oil and approximately 4.3 billion cubic feet of natural gas daily. The merged entity is expected to rank among the largest producers operating within the Delaware Basin.
Specifically, the Delaware Basin production is projected to reach about 863,000 Boe per day by the third quarter of 2025, spread across nearly 750,000 net acres concentrated in the basin’s core. This asset will constitute over half of the company’s total output and cash flow generation, reinforcing its strategic importance to the combined business.
Financially, the merger is expected to unlock $1 billion in annual pre-tax synergies by the end of 2027. These cost savings and operational efficiencies aim to enhance overall profitability. Additionally, the transaction is anticipated to be accretive to essential per-share financial measures, supporting strong shareholder value.
In terms of capital distribution, the combined company has outlined a plan to maintain a quarterly dividend of $0.315 per share and a substantial share repurchase program exceeding $5 billion, subject to board approval. These initiatives emphasize management’s commitment to returning capital to shareholders.
Management Perspectives and Market Reaction
Tom Jorden, Chairman, CEO, and President of Coterra Energy, highlighted the strategic fit of the merger, stating that it "enhances the Delaware" by bringing together two premier organizations sharing similar cultures focused on operational excellence, disciplined capital management, and data-driven decision making geared toward maximizing per-share value.
Devon Energy is scheduled to release its fourth-quarter 2025 earnings on February 17, 2026, while Coterra plans to report its results on February 26, 2026. Market response to the merger announcement was mixed, with Devon Energy shares trading down 2.81% at $39.08 during premarket hours and Coterra Energy shares declining 3.47% to $27.85, as reported by Benzinga Pro data.
Conclusion
The announced merger between Devon Energy and Coterra Energy represents a significant consolidation in the U.S. shale sector, establishing a major producer with a meaningful footprint in the resource-rich Delaware Basin. Through combining their operational expertise and complementary assets, the deal is positioned to generate sizeable production, financial synergies, and shareholder returns, subject to customary closing conditions and shareholder approvals.