Devon, Coterra merge to create U.S. shale giant in $58 billion deal

The largest deal in the sector since Diamondback's $26 billion acquisition of Endeavor Energy Resources in 2024 comes as a global oil glut and the increasing likelihood of more Venezuelan barrels returning to the market are pressuring U.S. crude prices, hurting shale producers' margins.

Even though M&As in the sector cooled in 2025, producers in the shale patch continue to pursue size advantages, from lowering per-barrel costs to extending drilling runways in maturing basins like the Permian and Anadarko.

Coterra shares have risen nearly 14% since deal talks were first reported on Jan. 15, while Devon has gained about 6%.

Both stocks were trading lower before the market opened on Monday. Devon was down about 3% and Coterra off 2.7%, tracking a roughly 5% slide in oil prices.

Under the deal, shareholders will receive 0.70 Devon shares for each share held. Devon will own roughly 54% of the combined company. The deal has an equity value of $21.4 billion, according to a Reuters calculation.

"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.

Devon and Coterra operate in several major U.S. shale formations, with overlapping positions in the Delaware portion of the Permian Basin in Texas and New Mexico, as well as in Oklahoma's Anadarko Basin.

The combined pro-forma 2025 production for the third quarter would exceed 1.6 million barrels of oil equivalent per day, including more than 550,000 barrels of oil and 4.3 billion cubic feet of gas.

Over half of production and cash flow would come from the Delaware Basin, where the combined company will hold roughly 750,000 net acres in the core of the play.

The merger is expected to close in the second quarter of 2026, after which the combined company will retain the name Devon, be based in Houston and maintain a major presence in Oklahoma City.

Devon CEO Clay Gaspar will lead the company, while Coterra CEO Tom Jorden will become non-executive chairman.