Devon and Coterra Merge to Form Shale Industry Powerhouse
Devon Energy and Coterra Energy have officially announced their merger, creating a significant new player in the shale industry. This all-stock transaction is valued at approximately $58 billion, marking a significant shift in the energy sector.
Merger Highlights
The merger will establish a formidable shale operator, particularly in the Permian Basin. The combined entity will operate across several key regions, including:
- Permian Basin
- Marcellus Shale
- Anadarko Basin
- Eagle Ford
- The Rockies
Production Capacity and Financial Synergies
Following the merger, projected production for the third quarter of 2025 is expected to exceed 1.6 million barrels of oil equivalent per day. This includes:
- More than 550,000 barrels of oil per day
- 4.3 billion cubic feet of gas per day
Both companies anticipate realizing about $1 billion in annual pre-tax synergies. This strategic move comes at a time when producers are grappling with lower oil prices, which complicate drilling profitability.
Drilling Opportunities and Capital Efficiency
The new entity will boast the largest inventory of drilling opportunities in the Delaware Basin, with a low breakeven point of under $40 per barrel. The merger is expected to enhance capital efficiency throughout its operations.
Shareholder Impact
Under the terms of the merger agreement, Coterra shareholders will receive 0.70 shares of Devon common stock for every share they hold in Coterra. Post-merger, Devon’s shareholders will retain approximately 54% ownership, while Coterra’s will hold about 46%.
Timeline and Approvals
The transaction has received unanimous approval from both companies’ boards. It is projected to close in the second quarter of 2026, pending necessary regulatory approvals and the approval of shareholders from both companies.
This merger positions Devon Energy and Coterra as a leading force in the shale industry, reinforcing their presence and operational capabilities for future growth.
