Devon Energy Corp. (NYSE: DVN) and Coterra Energy (NYSE: CTRA) agreed to merge in an all-stock transaction that implies a combined enterprise value of approximately $58 billion, forming one of the world’s largest shale producers.
Under the terms announced Feb. 2, Coterra shareholders will receive 0.70 shares of Devon common stock for each Coterra share. Upon completion, Devon shareholders will own approximately 54% of the combined company, with Coterra shareholders holding about 46% on a fully diluted basis.
The merged entity, which will retain the Devon Energy name and be headquartered in Houston, expects pro forma production exceeding 1.6 million barrels of oil equivalent per day, including more than 550,000 barrels of oil per day and 4.3 billion cubic feet of gas per day. Its portfolio will be anchored by nearly 750,000 net acres in the core of the Delaware Basin, accounting for more than half of total production and cash flow.
The companies project $1 billion in annual pre-tax synergies by year-end 2027, driven by an optimized capital program, operating margin improvements and reduced corporate costs. Devon plans a quarterly dividend of $0.315 per share and a new share repurchase authorization exceeding $5 billion upon closing, both subject to board approval.
“This transformative merger combines two companies with proud histories and cultures of operational excellence, creating a premier shale operator,” said Clay Gaspar, Devon’s president and CEO, who will lead the combined company. Coterra’s Tom Jorden will serve as non-executive chairman.
The transaction, unanimously approved by both boards, is expected to close in the second quarter of 2026, subject to regulatory approvals and shareholder votes. The combined company will carry a pro forma net debt-to-EBITDAX ratio of 0.9x and $4.4 billion in total liquidity.
Evercore is advising Devon, with Skadden Arps serving as legal counsel. Goldman Sachs and J.P. Morgan are advising Coterra, with Gibson Dunn as legal counsel.