Devon Energy and Coterra agree to all-stock merger forming a $58 billion Houston-based shale producer

Deal structure and timeline

Devon Energy and Coterra Energy announced on Feb. 2, 2026 that they have signed a definitive agreement to merge in an all-stock transaction that values the combined enterprise at about $58 billion. The combined company is expected to operate under the Devon Energy name and be headquartered in Houston, while maintaining a significant presence in Oklahoma City.

The agreement sets a fixed exchange ratio of 0.70 shares of Devon common stock for each share of Coterra common stock. On a fully diluted basis, Devon shareholders are expected to own roughly 54% of the combined company and Coterra shareholders about 46% after closing. The companies said the transaction was unanimously approved by both boards and is expected to close in the second quarter of 2026, subject to regulatory review, shareholder approvals, and other customary closing conditions.

Operational footprint: Delaware Basin scale and production mix

The merger brings together two large U.S. shale producers with an asset base anchored in the Delaware Basin portion of the Permian. The companies disclosed pro forma third-quarter 2025 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 natural gas per day.

They also reported that the combined Delaware position would total nearly 750,000 net acres, with pro forma Delaware production of about 863,000 barrels of oil equivalent per day. The Delaware assets are expected to account for more than half of the combined company’s total production and cash flow, with inventory depth described as extending beyond a decade at targeted economics.

Financial targets: synergies, capital returns, and balance sheet metrics

The companies projected $1.0 billion in annual pre-tax synergies, targeted to be achieved by year-end 2027. Identified sources include changes to the capital program, operating margin improvements, and lower corporate costs, alongside integration of technology platforms intended to improve capital efficiency.

• $1.0 billion in projected annual pre-tax synergies by year-end 2027
• Planned quarterly dividend of $0.315 per share after closing (subject to board approval)
• Planned share repurchase authorization exceeding $5 billion (subject to board approval)
• Estimated pro forma net debt-to-EBITDAX ratio of 0.9x and $4.4 billion of liquidity as of Sept. 30, 2025

Governance and what comes next

Devon’s president and CEO, Clay Gaspar, is set to lead the combined company. Coterra’s current leadership is expected to take a board role following completion, reflecting a governance structure intended to represent both shareholder bases.

Next steps include preparation of shareholder materials, regulatory review, and integration planning ahead of the targeted second-quarter 2026 closing window. Until the transaction closes, both companies said they will continue to operate independently.

The companies described the combination as intended to create a scaled, large-cap shale operator with a deeper inventory runway and a cash-return framework built around dividends and repurchases, contingent on post-closing approvals.