Devon Energy Corporation (NYSE:DVN) and Coterra Energy Inc. (NYSE:CTRA) announced on Monday that they have signed a definitive agreement to merge in an all-stock transaction that will create a large-cap U.S. shale producer with a core position in the Delaware Basin.
Under the agreement, Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share. Based on Devon’s closing price on January 30, 2026, the deal implies a combined enterprise value of about $58 billion.
The all-stock transaction deal, unanimously approved by both boards, is projected to close in the second quarter of 2026, pending customary closing conditions.
After deal closure, Devon shareholders are expected to own around 54% and Coterra shareholders about 46% on a fully diluted basis.
The combined company, to be named Devon Energy, will be headquartered in Houston while maintaining a significant presence in Oklahoma City.
Strategic Rationale and Asset Scale
The merger unites high-quality assets with complementary expertise, creating a large-cap E&P with long-lived inventory and resilient free cash flow.
The merger is expected to form one of the world’s top shale producers, with pro forma third-quarter fiscal 2025 production exceeding 1.6 million Boe per day, including over 550,000 barrels of oil and 4.3 billion cubic feet of gas daily.
The combined company is projected to be among the largest producers in the Delaware Basin.
The pro forma production for Delaware Basin is anticipated to be 863,000 Boe per day, spread across nearly 750,000 net acres in the core of the play in the third quarter of 2025.
This flagship asset is expected to account for over 50% of total production and cash flow.
The deal is expected to generate $1 billion in annual pre-tax synergies by year-end 2027.
The company expects the transaction to be accretive to key per-share metrics and supports shareholder returns through a planned $0.315 quarterly dividend and a share repurchase program exceeding $5 billion, subject to Board approval.
Management Commentary
Tom Jorden, Chairman, CEO, and President of Coterra stated, “This combination enhances the Delaware and brings together two premier organizations with complementary cultures rooted in operational excellence, disciplined capital allocation, and data‑driven decision-making focused on creating per share value.”
Devon Energy expects to report fourth-quarter 2025 results on February 17, and Coterra plans to report results on February 26, 2026.
Price Action: Devon Energy shares were down 2.81% at $39.08 during premarket trading on Monday, according to Benzinga Pro data. Coterra Energy shares were down 3.47% at $27.85.
Photo by T. Schneider via Shutterstock
