Devon Energy and Coterra Energy have signed a definitive agreement to merge in an all-stock transaction that the companies say will create a “premier shale operator” anchored by a leading position in the economic core of the Delaware Basin. The combined company will be named Devon Energy, headquartered in Houston, and will maintain a significant presence in Oklahoma City.
Under the terms of the deal, Coterra shareholders will receive a fixed exchange ratio of 0.70 shares of Devon common stock for each share of Coterra common stock (value at about $21.4 billion). Based on Devon’s closing price on January 30, 2026, the companies said the transaction implies a combined enterprise value of approximately $58 billion, with Devon shareholders expected to own about 54% of the combined company and Coterra shareholders about 46% on a fully diluted basis.
The companies are positioning the merger as a scale-and-synergy transaction built around complementary assets and technical capabilities, with an emphasis on capital efficiency and shareholder returns. They project $1 billion of annual pre-tax synergies, with the majority expected to be realized by year-end 2027 through an optimized capital program, operating margin improvements, and lower corporate costs. The combined business is also expected to integrate technology platforms and expand AI-driven optimization across subsurface, operations, and enterprise functions, which management says should improve decision-making and capital allocation at scale.
Operationally, the combined company is expected to be one of the world’s leading shale producers, with pro forma third quarter 2025 production exceeding 1.6 million barrels of oil equivalent per day, including more than 550 thousand barrels of oil per day and 4.3 billion cubic feet of gas per day. Within the Delaware Basin, the companies said pro forma third-quarter 2025 production would total 863,000 Boe per day across nearly 750,000 net acres in the core of the play, representing more than half of the combined company’s total production and cash flow, and supported by more than 10 years of high-quality inventory.
In capital returns, the combined company plans to declare a quarterly dividend of $0.315 per share and establish a new share repurchase authorization exceeding $5 billion, both subject to board approval. Management also highlighted what it described as an investment-grade financial profile, including an estimated pro forma net debt-to-EBITDAX ratio of 0.9x and $4.4 billion of total pro forma liquidity as of September 30, 2025, which they said should help lower the company’s future cost of capital.
Governance and leadership have been outlined as part of the agreement. The post-merger board is expected to have 11 directors, including six from Devon and five from Coterra. Devon President and CEO Clay Gaspar will lead the combined company as President and CEO, while Coterra Chairman, CEO, and President Tom Jorden will serve as Non-Executive Chairman of the Board. Executive leadership will be based in Houston and will include leaders from both companies.
The transaction was unanimously approved by both boards and is expected to close in the second quarter of 2026, subject to regulatory approvals, customary closing conditions, and shareholder approvals for both companies.
KEY QUOTES
“This transformative merger combines two companies with proud histories and cultures of operational excellence, creating a premier shale operator. We’ve now built a diverse asset base of high-quality, long duration inventory to drive resilient value creation and returns for shareholders through cycles. Underpinned by our leading position in the best part of the Delaware Basin, and a deep set of complementary assets, we expect to capture annual pre-tax synergies of $1 billion. This will drive higher free cash flow and greater shareholder returns beyond what either company could achieve alone.”
Clay Gaspar, President and CEO, Devon Energy
“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. 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. Devon Energy will be strongly positioned to deliver top-tier capital efficiency gains and consistent profitable per share growth through the commodity cycles.”
Tom Jorden, Chairman, CEO, and President, Coterra Energy
