Devon Energy and Coterra Energy have agreed to merge in a roughly $58 billion all-stock transaction, including debt, in one of the biggest US shale deals in recent years.
Under the terms of the agreement, Coterra shareholders will receive 0.70 Devon shares for each Coterra share they hold.
Based on Devon’s closing price on Friday, the transaction implies an enterprise value of about $58 billion.
The combined company will retain the Devon Energy name and is expected to have a market capitalisation of more than $47 billion.
Following the merger, Devon shareholders will own about 54% of the new company, while Coterra shareholders will hold the remaining 46%.
The deal is expected to close in the second quarter, subject to regulatory approvals and shareholder votes.
Devon Energy’s share price fell by more than 2% in Monday premarket trading, while Coterra fell by more than 3.7%.
Creating a shale heavyweight
The merger will create one of the world’s largest shale producers, with expected production of around 1.6 million barrels of oil equivalent per day in the third quarter of this year.
The combined company will have a broad asset base across major US shale basins, including the Permian and Anadarko.
Executives from both companies said the transaction would strengthen operational scale and improve capital efficiency.
“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,” Coterra Chief Executive Tom 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.
The companies estimate that the merger will unlock around $1 billion in annual pretax synergies by the end of 2027.
“This will drive higher free cash flow and greater shareholder returns beyond what either company could achieve alone,” said Devon Chief Executive Clay Gaspar.
Gaspar to remain chief of the combined company
Gaspar is expected to remain president and chief executive of the combined company, while Jorden will serve as nonexecutive chairman of the board.
The board will include six Devon-appointed directors and five Coterra-appointed directors, with leadership roles shared between both management teams.
The company plans to maintain a shareholder-friendly capital return strategy, including a quarterly dividend of 31.5 cents per share and a stock-buyback programme exceeding $5 billion.
Analysts flag improved scale, inventory depth and investor appeal
Wedbush analyst Michael Piccolo said the merger would strengthen the combined company’s position in the Permian Basin, particularly in the Delaware sub-basin, and provide the scale needed to compete with industry leaders such as Exxon Mobil and Diamondback Energy.
“The combination is incrementally positive for both shareholders, as it brings together two high-quality companies to create a larger entity that should garner greater investor interest in today’s volatile energy tape,” said Siebert Williams Shank & Co. analyst Gabriele Sorbara.
The merger between Devon Energy and Coterra Energy is also expected to significantly expand the former’s Delaware Basin footprint in southeast New Mexico and west Texas, according to BMO Capital Markets.
“The acquisition will also expand Devon’s reach in the Anadarko Basin, located in western-central Oklahoma and the Texas Panhandle, as well as add a high-return asset in Marcellus. We rank both companies high on asset quality, with comparable returns and inventory depth across the portfolios,” the analysts said.
Industry context and consolidation trend
The Devon–Coterra deal marks the largest US shale merger since Diamondback Energy’s acquisition of Endeavor Energy Resources for about $26 billion in 2024.
Although merger activity slowed in 2025, shale producers have continued to pursue scale as a way to lower costs, extend drilling inventories and improve resilience in mature basins.
Rising competition, fluctuating commodity prices and investor pressure to deliver consistent returns have encouraged companies to seek strategic combinations.
The merger also comes against a backdrop of improving energy markets, with Devon shares up nearly 18% over the past year and Coterra shares rising about 4%, while natural gas prices and broader equity indices have also advanced.
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