A pump jack operates at a well site leased by Devon Energy near Guthrie, Okla., in 2015.Nick Oxford/Reuters
U.S. shale producers Devon Energy DVN-N and Coterra Energy CTRA-N said on Monday they will merge in a US$58-billion all-stock deal, creating a large-cap producer with a dominant position in the Delaware Basin as the industry consolidates to cut costs and boost scale.
Under the deal shareholders will receive 0.70 Devon shares for each share held. Devon will own roughly 54 per cent of the combined company.
Devon shares fell 3 per cent and Coterra dropped 2.7 per cent in premarket trading on Monday, tracking a 5-per-cent decline in the broader oil market.
A merger between Devon and Coterra brings complementary acreage together at a time when securing high-quality inventory is a priority and crude prices remain under pressure.
Devon said overlapping assets and operations will boost free cash flow and cut costs, supporting dividends and buybacks through price cycles.
The deal has an equity value of US$21.4-billion, according to a Reuters calculation.
This deal is the largest tie-up in the U.S. shale industry since Diamondback acquired Endeavor Energy Resources for about US$26-billion in 2024.
The companies expect the merger to close in the second quarter of 2026.
The combined company will keep the Devon name and base itself in Houston, Tex., while maintaining a major presence in Oklahoma City, Okla.
Devon CEO Clay Gaspar will lead the combined company, while Coterra CEO Tom Jorden will serve as non-executive chairman of the board.