Devon Energy And Coterra Announce $58 Billion Merger

On February 2, 2026, the American energy sector witnessed a seismic shift as Devon Energy and Coterra Energy announced a $58 billion all-stock merger, creating what many analysts are calling a shale oil and gas giant. The deal, which will see the combined company operating under the Devon Energy name and relocating its headquarters to Houston, is poised to reshape the landscape of U.S. shale production and corporate influence in the sector.

According to multiple sources, including KOKH, Reuters, and KOCO 5, the merger is expected to close in the second quarter of 2026, pending regulatory approval and shareholder votes from both companies. Devon shareholders will own approximately 54% of the new entity, while Coterra shareholders will hold around 46%. The merger terms specify that Coterra shareholders will receive 0.70 shares of Devon common stock for each share of Coterra common stock they own, based on Devon's closing price on January 30, 2026.

The rationale behind this blockbuster deal is clear: scale, efficiency, and resilience in a challenging market. The newly combined Devon Energy will boast pro forma third quarter 2025 production exceeding 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 daily. The company will command roughly 750,000 net acres in the Delaware Basin core, the heart of the Permian Basin that stretches across Texas and New Mexico. Over half of the merged company’s production and cash flow is projected to come from this prolific region.

Clay Gaspar, Devon’s President and CEO, will lead the combined company, while Tom Jorden, Coterra’s current CEO, will assume the role of Non-Executive Chairman of the Board. The board will total 11 members, with six from Devon and five from Coterra, ensuring representation from both legacy organizations. Executive leadership will be based in Houston, but both companies have repeatedly emphasized that Oklahoma City—Devon's birthplace—will remain a significant operational hub.

Gaspar described the merger as “transformative,” stating in a news release cited by KOCO 5, “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.”

Tom Jorden echoed these sentiments, noting, “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.”

The merger comes at a time of mounting pressure on U.S. shale producers, as a global oil glut and the increasing likelihood of Venezuelan barrels returning to the market have depressed crude prices and squeezed margins. While mergers and acquisitions in the sector slowed in 2025, the drive for consolidation remains strong among companies seeking to cut costs, extend drilling runways, and remain competitive in maturing basins like the Permian and Anadarko.

Industry analysts have largely welcomed the move. Gabriele Sorbara, an analyst at Siebert Williams Shank, told Reuters, “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.” Andrew Dittmar, principal analyst at Enverus Intelligence Research, pointed to the potential for $700 million in capital optimization and margin improvements, adding, “The combination of Devon and Coterra demonstrates that the wave of consolidation sweeping U.S. shale isn’t finished yet.”

Financially, the merger is expected to deliver $1 billion in annual pre-tax synergies by year-end 2027, achieved through an optimized capital program, improved operating margins, and streamlined corporate costs. Company leaders have also announced plans for higher dividends and a share buyback program exceeding $5 billion, aiming to reward shareholders and enhance the company’s market appeal. Additionally, Devon and Coterra plan to combine and develop their artificial intelligence capabilities to further enhance operational efficiency.

Despite the move of headquarters to Houston, Devon Energy is making efforts to reassure stakeholders in Oklahoma City. The company has reiterated its commitment to maintaining a significant presence in the city, a sentiment echoed by state and local officials. Chad Warmington, President and CEO of the State Chamber of Oklahoma, released a statement congratulating the companies, saying, “Today marks a significant moment for Oklahoma City and the State of Oklahoma. Devon Energy has been a transformative force not only for our city, but for the entire state, strengthening our economy, shaping our skyline, and setting a high standard for corporate citizenship through its deep investment in communities across Oklahoma. Devon’s influence reaches far beyond energy, and its legacy here is enduring. We congratulate Devon and Coterra Energy on a historic merger that will create one of the most significant energy companies in the nation. Oklahoma City is Devon’s birthplace, and while this announcement marks a new chapter, we are optimistic that Oklahoma City will remain an important part of Devon’s future.”

Still, there are lingering questions, especially regarding jobs in Oklahoma City. Lieutenant Governor Matt Pinnell told KOCO 5 that details about staffing and employment impacts are still being worked out. “That’s an ongoing conversation with Devon. Devon certainly will be putting out more of those details into the future. We’re going to do everything that we possibly can do at 23rd and Lincoln to make sure that that significant presence is significant and that it stays here, right here in Oklahoma City,” Pinnell said.

The deal’s timing is noteworthy, coming on the heels of other major consolidations in the energy sector, such as Diamondback’s $26 billion purchase of Endeavor Energy Resources in 2024. The Devon-Coterra merger, however, stands out as the largest in the sector since then, underlining the continuing trend toward consolidation as companies seek to weather market volatility and ensure long-term growth.

With a combined portfolio providing more than a decade of high-quality drilling inventory—including the largest share of sub-$40 break-even wells in the sector—the new Devon Energy is positioning itself as a resilient leader in U.S. shale. As the dust settles on this historic deal, all eyes will be on how the company navigates its new scale, delivers promised efficiencies, and maintains its deep roots in both Houston and Oklahoma City.

For the communities, employees, and investors involved, the next chapter of Devon Energy promises both opportunity and uncertainty, as the company seeks to deliver on the bold promises of this transformative merger.