BY Richard Summerfield
US shale producers Devon Energy and Coterra Energy have announced the first large oil & gas deal of 2026 - a $58bn all-stock merger which will create a new sector giant.
Under the terms of the deal, Coterra shareholders will receive 0.70 Devon shares for each share held. Devon will own roughly 54 percent of the combined company. The transaction has an equity value of $21.4bn.
Unanimously approved by the boards of directors of both companies, the deal is expected to close in the second quarter of 2026, subject to regulatory approvals and customary closing conditions, including approvals by Devon and Coterra shareholders. The deal is the largest in the sector since Diamondback’s $26bn acquisition of Endeavor Energy Resources in 2024.
According to a statement announcing the merger, the combined company will be named Devon Energy and headquartered in Houston while maintaining a significant presence in Oklahoma City. Clay Gaspar, president and chief executive of Devon, will lead the company, while Tom Jorden, chairman, chief executive and president of Coterra, will become non-executive chairman.
The formation of this new combined company is expected to unlock substantial value by leveraging each company’s core strengths and through the realisation of $1bn in annual pre-tax synergies. The realisation of synergies, technology-driven capital efficiency gains and optimised capital allocation will drive near and long-term per share growth.
“This transformative merger combines two companies with proud histories and cultures of operational excellence, creating a premier shale operator,” said Mr Gaspar. “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.”
“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,” said Mr Jorden. “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.”
Upon completion, the newly combined company will be one of the world’s leading shale producers, with pro forma third quarter 2025 production exceeding 1.6 million barrels of oil equivalent (boe) per day, including over 550,000 barrels of oil per day and 4.3 billion cubic feet of gas per day.
The combined company’s portfolio will be anchored by acreage in the Delaware Basin, complemented by a balanced and diversified product mix that positions the company to deliver a resilient free cash flow profile. The company will also be one of the largest producers in the Delaware Basin, with pro forma third quarter 2025 production of 863,000 boe per day distributed across nearly 750,000 net acres.
News: Devon, Coterra merge to create U.S. shale giant in $58 billion deal