As the industry consolidates to reduce costs and increase scale, U.S. shale producers Devon Energy and Coterra Energy announced on Monday that they will merge in a $58 billion all-stock deal, creating a large-cap producer with a dominant position in the Delaware Basin.
Under the terms of the deal, shareholders will receive 0.70 Devon shares for each share held, and Devon will own about 54% of the combined company.
Following a 5% decline in the overall oil market, Devon shares fell 3%, and Coterra dipped 2.7% in premarket trade on Monday.
A merger between Devon and Coterra brings complementary acreage together at a time when obtaining high-quality inventory is a priority and oil prices remain under pressure.
Devon said overlapping assets and operations will enhance free cash flow and save expenses, supporting dividends and buybacks across price cycles. The acquisition has an equity value of $21.4 billion.
Since Diamondback paid over $26 billion to acquire Endeavour Energy Resources in 2024, this agreement is the biggest partnership in the US shale sector.
The firms expect the merger to finalize in the second quarter of 2026.
The combined business will maintain a significant presence in Oklahoma City, retain the Devon name, and locate its headquarters in Houston.
Tom Jorden, CEO of Coterra, will serve as the non-executive chairman of the board, and Devon CEO Clay Gaspar will lead the combined business.
