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Devon, Coterra Strike $58 Billion Deal to Build Shale Powerhouse

By  |  February 2, 2026

Devon Energy and Coterra Energy said Monday they have agreed to a $58 billion all-stock merger that will create one of the largest U.S. shale producers, giving the combined company a dominant foothold in the Permian Basin at a time when the industry is under pressure to get bigger and more efficient. The deal reflects a new wave of consolidation across the shale patch, per a CNBC, as companies look to lower costs and stretch out drilling inventories in maturing fields.

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    The transaction is the biggest in the sector since Diamondback Energy’s $26 billion purchase of Endeavor Energy Resources in 2024, according to a CNBC. It comes as global oil markets are dealing with oversupply and the possibility that more Venezuelan crude could soon return to international trade, developments that have weighed on U.S. oil prices and narrowed profit margins for domestic producers.

    While dealmaking slowed across the energy sector in 2025, producers have continued to pursue mergers that promise operational scale, from cutting per-barrel expenses to extending the life of drilling programs in areas such as the Permian and Oklahoma’s Anadarko Basin, per a CNBC.

    Investor reaction has been mixed. Coterra shares have climbed nearly 14% since news of potential talks first surfaced on Jan. 15, while Devon stock has gained about 6% over the same period. However, both stocks were lower ahead of the market open on Monday, with Devon down roughly 3% and Coterra off about 2.7%, moves that mirrored a broader slide of around 5% in oil prices, according a CNBC.

    Related: Devon Energy to Buy Grayson Mill’s Williston Assets for $5B

    Under the terms of the agreement, Coterra shareholders will receive 0.70 shares of Devon for each share they own, leaving Devon investors with about 54% of the merged company. Based on current prices, the equity portion of the transaction is valued at about $21.4 billion, according to a Reuters calculation cited by a CNBC.

    Industry analysts see strategic benefits in the combination. “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,” said Siebert Williams Shank & Co. analyst Gabriele Sorbara.

    Together, the companies will have a wide footprint across some of the most prolific U.S. shale regions. Both already operate in the Delaware sub-basin of the Permian in Texas and New Mexico, as well as in Oklahoma’s Anadarko Basin. On a pro-forma basis, third-quarter 2025 production for the combined company would top 1.6 million barrels of oil equivalent per day, including more than 550,000 barrels of crude and about 4.3 billion cubic feet of natural gas, per a CNBC.

    More than half of overall output and cash flow would come from the Delaware Basin, where the merged company will control roughly 750,000 net acres in the heart of the play, giving it one of the largest and most concentrated positions in the region.

    Source: CNBC